Thursday 23 January 2020

Charlie Weston: 'Horrifying reading for more than two million motorists as it's official insurers are ripping off drivers'

(Stock image)
(Stock image)
Charlie Weston

Charlie Weston

SO now we know and it is official. Insurers are ripping off motorists. We have all suspected that to be the case and now the Central Bank has confirmed it.

And before lawyers engage in their usual game of blaming our insurance crisis on insurers, they have been shown up in a bad light too in an explosive new data set from the Central Bank.

All the whinging and moaning from motor insurers has been blown to smithereens from the first edition of the new National Claims Information Database.

The phrase “rip-off” is much over-used, but in this instance it is entirely appropriate.

Try and spin out of this lads and lasses. It looks bad and it is bad.

Because the bottom line is that insurers have been making hay from motorists, while constantly complaining about high claims costs.

And remember that car insurance is not a luxury. It is mandatory. This makes it all the more galling that we are been taken to the cleaners by a shameless insurance industry.

The Central Bank asked every motor insurer operating in this State, whether they are based here or abroad, for detailed data on their claims, costs, premiums and other factors.

What came back makes for horrifying reading for the more than two million motorists in this country.

Over the last decade motor premiums costs have shot up. They were too low from about 2015, but boy did the insurers set about changing that.

The average premium is now 42pc higher at €700 than a decade ago. In the last five years alone premiums costs are up an extraordinary 62pc.

To be fair to insurers, the Central Bank has found evidence that motor premiums stabilised last year and are down this year.

But there must be a major question mark over the fairness of pushing up premiums to such extent before that when the cost of claims over the last decade has actually fallen by 2.5pc.

Granted, average injury claims are 50pc higher than a decade ago at €47,000, but overall claims costs are down.

Investment income is no longer significant, and other costs for insurers have actually fallen.

What all this means is that profitability is way up for motor insurers. Profits of 9pc of income last year of income are considered very health.

And nor can claims triggering lawyers indulge in their usual game of deflecting blame from themselves by saying, “we told you so” about insurers.

They are shown up as adding little but expense to the process of settling claims.

Average legal costs amount to more than half the amount awarded for injury claims.

For smaller claim awards, those under €100,000, legal costs represent 63pc of the compensation paid.

Legal fees include lawyer income, medical costs and other expenses.

Most litigated claims taken far longer to settle than those that go through the State’s Personal Injuries Assessment Board.

The average award level is the same for cases settled by the Injuries Board as those that go though the courts.

The time is long overdue for insurers to stop the spinning, blaming high levels of claims for high premiums, and just cut the cost of cover.

And lawyers would be well advised to face up to the reality of their role in pushing up the cost of motor cover.

Online Editors

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