More motor insurance cases must be settled in court to tackle 'dysfunctional market' - Fianna Fail
Increasing levels of road accident cases being settled outside of court has led to people's motor insurance costs spiralling, Deputy Michael McGrath has claimed.
The Fianna Fail TD said despite figures from the Central Statistics Office showing the the average motor insurance premium was 2.6per cent lower last month compared to the same period in 2016, people are still being hit with renewals that are up to 40pc more expensive.
The Cork representative said today: "It hasn't happened overnight, there has been a trend now for three or four years, in 2014 premiums went up by 12pc, the following year by 31pc, that was a killer and then in 2016 by 9pc.
"The CSO data has showed it's levelling off but that's not to say that many individuals who are receiving their renewals in the post have seen large increases, because the reality is they are, we have a dysfunctional market.
"The issue at its core comes down to award levels and issues around that."
Speaking on Newstalk Breakfast, he continued to say: "We had this before and the injuries board was set up following a motor insurance advisory's work in the early 2000s, that had an impact.
"What we're seeing now is that more and more cases are bypassing the injury board and essentially the courts process.
"Up to 70pc are actually being settled outside of court and you have to question why they're doing this.
"I think the key reason is insurance companies won't take the risk to have the final determination made in the court of law because they don't have confidence that there will be consistency in the level of award, so need to close those loopholes and ensure there's a proper statutory process.
There's a strong suspicion that in many cases insurance companies are paying "Go away" money."
Read More: Shock fall in cost of insuring your car
He also said that despite efforts by the government to tackle this issue, it isn't enough.
He said: "There's lots of things we can do - last year in the Dail we put down our private members motion focusing on motor insurance, looking for a dedicated group to be established to tackle the problem, the following month the government responded and a working group was established and in parallel the finance committee did a lot of work on this issue as well.
"The government report came out in January with over 30 recommendation and 70 action points, it's been implemented but I don't think it's ambitious enough and it's not being implemented quickly enough."
Eoghan Murphy, Minister of State for Financial Services, said that the government is doing all it can to help drive down the cost of motor insurance.
The Fine Gael Deputy said: "The government can't intervene directly in the price of an insurance premium, that's according to EU law.
"We have a dysfunctional market and we have to be careful when the government makes any intervention in the market that it does so in a way that doesn't impact on competition or the stability of that market, so we can continue to have business insurance or motor insurance.
"We've seen a positive trend in the last five months but it's still early days...
"Most insurance companies reported an under-riding loss last year, what we're trying to do is that we continue to be vigilant in implementing the reforms that we've had in the Cost of Insurance Working Group that I chaired last year and the very good work that was done by the Oireachtas Committee as well.
"I like the fact that the political actors that have been working together on this have a serious determination to show vested interests that we're going to get the work done."
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