Monday 21 October 2019

Industry denies overstating false claims problem as excuse for premium rises

Pearse Doherty: Insurance companies are using false claims as an excuse to hike premiums. Photo: Liam McBurney/PA
Pearse Doherty: Insurance companies are using false claims as an excuse to hike premiums. Photo: Liam McBurney/PA
Charlie Weston

Charlie Weston

The insurance industry has rejected claims that it is inflating the extent of false and exaggerated compensation claims in a bid to justify premiums rises.

It comes after three leading insurance companies admitted to Sinn Féin's Pearse Doherty that they are only reporting a tiny number of suspicious claims to gardaí.

Mr Doherty questioned if fraudulent claims are the reason premiums are so high. He said there were just 19 fraudulent cases reported to gardaí by insurers between last October and March.

This was despite the three insurance companies earlier claiming that one in five false claims they receive is exaggerated or fraudulent.

But the industry insisted that fraud accounts for €50 per motor policy.

Insurance Ireland said: "There are high compensation awards and little sanction for fraudulent claims. This will create a higher incentive for fraud."

It referred to a comment from Mr Justice Nicholas Kearns in April when he said: "The frequency of exaggerated and fraudulent claims in this jurisdiction is now well known and there are daily reports in the media now of spurious and phony claims being thrown out by the courts."

Former High Court president Mr Justice Kearns chaired the Personal Injuries Commission for the Government, which found that awards for minor injuries in this country are almost five times those in England.

Insurance Ireland insisted members have been active in referring cases of suspected fraud to gardaí. In 2016 there were 167 cases referred, 404 cases referred in 2017, and 198 cases referred in the first half of 2018, it said.

Director general of the Law Society Ken Murphy said Mr Doherty had "laid bare what he said was insurers' distraction technique of blaming false and exaggerated claims, rather than their own profiteering, for the excessive premiums that threaten the survival of so many Irish businesses".

Given what had emerged, Mr Murphy asked if insurers should not now report themselves to gardaí?

Asked about the role of solicitors in exaggerated and false claims, the Law Society said that if it receives evidence that a solicitor is knowingly colluding with a client to mislead the court an investigation will take place. If the investigation discloses evidence of misconduct, the society will apply to the Solicitors Disciplinary Tribunal for a full sworn disciplinary enquiry, Mr Murphy insisted.

Irish Independent

Also in Business