A new levy is to be added to all car insurance policies by the government.

A new levy is to be added to all car insurance policies by the government.

It comes at a time when many drivers are struggling with the cost of soaring car insurance costs.

According to the Irish Independent, this third levy is to fund compensation for those who lost out after the collapse of Setanta Insurance in 2014.

2 separate levies at 2 and 3 percent are already in place - bringing the total levies applied to all motor policies to 7 percent.