Saturday 21 April 2018

Four ways to help curb the sky-high cost of your car insurance

  • Expert says: 'Too much money in the system'

  • Solution lies with government taking action

Car insurance
Car insurance
George O'Connor, Enterprise managing director
Eddie Cunningham

Eddie Cunningham

Insurance costs could be significantly curbed if the government is prepared to do four things, according to radical proposals.

Doing so would involve a major shift in policy as well as imposing new rules to tackle the key elements that are fuelling insurance inflation, it is claimed.

Based on a submission to an Oireachtas Committee, the proposals aim to reduce the 'compo culture' that has grown up around car cover.

It might seem strange the submission has come from the likes of Enterprise Rent-a-Car Ireland. But their worldwide database of provision for 'soft tissue' insurance claims highlights how Ireland's cost of relatively minor injuries is much higher than any other country/market in which they operate.

It is multiples ahead of New York, Spain and Manchester, for example.

Enterprise's managing director George O'Connor (pictured) believes that is the starting point for redressing the high cost of settlements here.

He says there is "too much money in the insurance claims system", insufficient scrutiny of claims and an overly expensive process.

Speaking to Independent Motors he said: "The level of insurance awards for claims like soft-tissue injury is at the root of the problem in Ireland.

"I have spoken with our corporate liability claims team. They told me that the average payout in Ireland for soft tissue injury claims can be up to 300pc higher than in other countries.

"It is quite simple. If the cost of an average claim is three times what it is in another European market, then the insurance premiums here will be three times the cost of premiums in other markets."

He estimates the average payout for a soft-tissue injury claim here is currently €15,000. In contrast, the average in the UK for a similar claim is £5,000, while in Spain and Germany, the payment would be €3,000 and €5,000 respectively.

"To reduce premiums, you have bring down the average payout for, in particular, soft-tissue injury claims." He says it is important that those making the awards realise they have a direct impact on the cost of insurance premiums.

Mr O'Connor ties all those comments into what he insists are four key elements that would drastically cut and curb insurance costs.

His proposals include:

1. Introducing an EU benchmark for soft-tissue and personal injuries.

That would lower Irish costs to nearer the EU average.

2. Making it compulsory for insurers to fund an initial medical assessment and treatment plan for people making a claim.

3. Changing the current Injuries Board process to ensure more independent experts are used to diagnose injury; that objective evidence of injury supports the diagnosis; and all claimants should have to prove damages within the Board's process.

4. Making all Injuries Board awards binding, without providing routine litigation access to dispute a settlement.

There is no doubt that some of those proposals are radical and would face stiff opposition.

But it is going to take a radical approach, of whatever nature, to reduce costs. What do you think?

Indo Motoring

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