Drivers in for more pain as premiums set to soar again
Published 13/08/2016 | 02:30
Hard-pressed motorists are in for a shock, with insurance bills set to soar even further.
The chief executive of insurance firm FBD, Fiona Muldoon, has said it will hike motor premiums by an average of 10pc in the coming months - on top of an 18.7pc rise that it has already imposed since June of last year.
But she warned that the impending increases were based on an assumption that the claims environment stabilises. If that doesn't happen, the rise could be even higher.
"If it jumps again, then all bets are off," she told the Irish Independent.
Motorists are already reeling from insurance renewal quotes that have increased by more than 50pc in a year. In fact, the increases insurers are imposing are so big that they're affecting the country's inflation figures.
According to the Central Statistics Office, it is now 38pc more expensive to insure a car than it was this time last year. And since 2013, average motor premiums have soared by 70pc.
Insurance companies, including FBD, have blamed soaring court awards and an overall higher number of claims for the huge premium increases.
"Motor insurance has risen by 18.6pc in the past 12 months in FBD's case and I'd say we have about another 10pc to go," said Ms Muldoon.
She said the company postponed a planned rise in tractor insurance for farmers, given the difficult conditions in the farming sector at the moment.
Ms Muldoon argued that there needed to be structural reform of the insurance claims system if premiums were to fall.
"Our insurance customers and all insurance customers are paying more for their cover than they would if they lived in other countries," she said.
Reform of the claims system here would require legislative change. "I think the costs are going to be passed onto commuters, farmers and small businesses until we all get serious about this," she said.
"You can either have high awards and compensation, or you can have cheap insurance for everybody. It's high awards for a few or cheap insurance for everyone."
Ms Muldoon said the issue was not catastrophic injuries.
"It's the smaller awards - it's the whiplash awards, the hurt knee, sprained finger or psychological distress and people bypassing the Injuries Board and going straight to court and scaring an insurance company into an early settlement."