Motor insurers have overdone premium price rises
Published 03/01/2016 | 02:30
The time has come for motor insurers to take a step back and stop pushing up premiums - the increases they have introduced over the last 12 months have been nothing short of scandalous.
Official figures show the average premium has risen by 26pc in the past year, and the sector has warned of similar rises to come this year.
This means motorists who were paying around €400 last year will face a bill of some €700 by the end of this year.
These whacking great increases have left motorists reeling and shocked. And they have every right to question why they are being saddled with such extortionate rises.
Drivers are paying the price for insurance executives' shocking mismanagement of their own companies, regulatory failure by the Central Bank and the re-emergence of chancers getting away with spurious compensation claims.
And it is not as if we haven't been here before. Everyone with motor insurance is paying a 2pc levy on their policy for the management failures and the regulatory mistakes that saw Quinn Insurance having to be rescued. The bill for that imbroglio is €1bn and rising.
And that is not so long ago - it was only in 2010 that the courts approved the appointment of an administrator to Quinn Insurance. It seems we just never learn in this country. And 10 years after the Government was forced to put in place the Injuries Board, the State agency through which personal injuries claims must be brought, we are again seeing a surge in fraudulent claims. The agency was set up to cut the cost of settling claims. It does not make any direct payments to lawyers. But it only ends up dealing with a small proportion of motor claims.
Claimants can reject an Injuries Board award, or just refuse to co-operate with it and take their claim to the courts. If they win in court, it can mean a larger payout.
Claims expert Dorothea Dowling and Fianna Fail finance spokesman Michael McGrath are among those calling for Government action to examine how seven out of 10 claims are settled directly by insurers without an open record of how the settlement was arrived at.
Yes, there has been an increase in dodgy claims - but increasingly we are seeing judges becoming more circumspect after good background work by insurers who have ferretted out information to prove to courts that some of the claims are exaggerated or just fraudulent.
That is a plus for insurers.
The time for premium hikes has to come to an end.
If insurers cannot sort out their financial problems after premium rises of 20pc to 30pc, then they should give up. Enough is enough.
Sunday Indo Business