Car insurance premiums on the up despite drop in claims costs
Insurance firms in Ireland have been accused of increasing premiums despite massive drops in the costs for them of settling claims.
New judicial guidelines were introduced by Government in April 2021 which led to lower levels of damages for insurance claims.
There was a 40 per cent drop in the average injury award after the guidelines were introduced, which put pressure on insurers to cut premiums.
However, insurers have repeatedly said they will pass on lower costs from reforms in the form of lower premiums. Is it any surprise that this is not happening? In fact the insurance industry is again loading on higher premiums on motorists.
It is surely time for Government to take off the gloves to protect hard-pressed motorists from price gouging? How long before Government acts against the insurance companies that seem to be a law unto themselves?
Peter Boland, director of the Alliance for Insurance Reform said: “In recent weeks we are starting to get more reports of private motor insurance premiums increasing on renewal.”
He added that it was “unconscionable” that premiums would rise rather than drastically drop, despite guidelines setting out lower award levels for minor injuries were expected to lead to much cheaper insurance.
The most recent report from the Personal Injuries Assessment Board (PIAB) shows that the average personal injury award by PIAB between January and June 2022 was €14,786, some 38 per cent lower than before the guidelines were implemented.
“Irish liability insurers have ignored the massive reforms put in place by Government and continue to increase premiums, and there are early indications motor insurers may now be doing the same.
“If that turns out to be the case, then they are taking the Government and Irish motorists for a ride,” Mr Boland added.
Motor insurers are also set to benefit from new legislation that came into operation this week aimed at reducing the number and costs of personal injuries claims.
Under the measures, claimants who go to court after rejecting an assessment by the PIAB of the value of their claim will not recover their legal costs and may face paying the other side’s costs if the court ultimately awards them a lower amount than the PIAB assessment.
PIAB will also have more time to assess claims where an injury has yet to settle, and will also assess claims of a wholly psychological nature.
It will be an offence to supply false information to PIAB, and the legislation empowers PIAB to disclose information to gardaí.