Irish Car Insurance Premiums Rise 4% to €655 as Vehicle Repair Costs Surge
Dublin: Car insurance premiums in Ireland have risen again amid increasing vehicle damage claims and higher repair costs. The average annual private motor insurance premium increased by 4 per cent to €655 in 2025, according to a report based on data from the Central Bank’s National Claims Information Database.
Despite the annual increase, there were signs of relief towards the end of the year. Average premiums fell by 0.4 per cent in the second half of 2025 compared with the first six months, raising hopes that the downward trend could continue into 2026.
Premiums rise 16% in three years
The average motor insurance premium reached a peak of €721 in 2017 before falling to €557 in 2022. However, premiums have increased steadily since then, rising by 16 per cent between 2022 and 2025.
The Central Bank said that although personal injury compensation costs have declined, higher costs associated with vehicle damage claims are pushing up insurers’ overall expenses.
The average cost of claims incurred by insurers per policy rose by 10 per cent last year to €424.
Vehicle repair costs continue to climb
The average cost of vehicle damage claims reached €197 per policy, the highest level recorded in the database.
Meanwhile, the average cost of settling an individual vehicle damage claim increased by 2 per cent to €3,024. This represents a 96 per cent increase compared with the average for the 2015–2019 period.
Insurance Ireland, which represents insurance companies, attributed the rising costs to more expensive vehicle repairs, spare parts and other supplies, as well as supply chain disruptions.
Insurers spend approximately 60 per cent of the premiums they collect on settling claims, with around 32 per cent going towards compensation for vehicle damage, according to the report.
Personal injury compensation costs decline
The Central Bank said the impact of the guidelines used to assess personal injury compensation was becoming increasingly evident.
Compared with 2019, the average compensation payment had fallen by 13 per cent, while the number of claims had declined by 20 per cent.
The changes have been driven by personal injury compensation guidelines used by the courts and the Injuries Resolution Board.
Seana Cunningham, the Central Bank’s director of insurance, said the decline in both the number of injury claims and average compensation payments was helping to stabilise the motor insurance market.
Legal costs exceed compensation in court cases
The report also highlighted the substantial legal costs associated with personal injury claims settled through the courts.
For motor accident injury claims with a total settlement cost below €100,000, the average compensation payment was €19,600, while legal costs averaged €19,902.
By comparison, claims in the same cost category settled through the Injuries Resolution Board had an average compensation payment of €19,734 and legal costs of just €791.
The Alliance for Insurance Reform called for action to address the high legal costs associated with court settlements, particularly when compensation payments remain broadly similar.
Tracy Sheridan, a board member of the organisation, said the government should take steps to ensure that more eligible claims are resolved through the Injuries Resolution Board rather than the courts.
Consumers hope for further premium reductions
Insurance Ireland chief executive Moyagh Murdock said the downward trend in premiums that began in the second half of 2025 was expected to continue into 2026. She said the trend indicated that consumers were beginning to benefit from insurance reforms.
However, the Alliance for Insurance Reform expressed disappointment that annual premiums had risen by another 4 per cent. The organisation welcomed the recent reductions in premiums and the slower pace of increases in vehicle maintenance costs.
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