Surge in drivers using ‘last resort’ to get insurance

Almost 2,000 people who were repeatedly refused car insurance last year had to opt for a “declined cases agreement” just to get a quote.

There has been a 15-fold increase in the numbers seeking this last resort option over the last six years which has led to claims that the motor insurance industry is “dysfunctional” and is becoming more selective about those it is willing to insure.

Under the declined cases agreement, the insurance market undertakes not to refuse to provide third-party motor insurance to an individual who has approached at least three insurers. There has to be an agreement as it is mandatory for motorists to have at least third-party insurance here.

In 2010, Insurance Ireland, which administers the scheme, dealt with 130 cases. That compares with 1,941 in 2016. The number of cases has been almost doubling by the year since 2012.

Finance Minister Michael Noonan said Insurance Ireland has told him that it secured a quotation for all the applicants in question through the agreement and that it therefore considers all of these applications to have been successful.

However, Fianna Fáil finance spokesman Michael McGrath said the massive increase in people applying to the scheme was a sign of a dysfunctional market and provided further evidence that insurance companies were being more selective in the customers that they were willing to take on.

Mr McGrath also said there needed to be more certainty around award levels as, at present, 70% of claims were being dealt with outside court and outside the injuries board.

In an answer to a parliamentary question from Mr McGrath, Mr Noonan said the Cost of Insurance Working Group examined the issue of the declined cases agreement, on foot of receiving submissions and queries from individuals about its operation.

“In light of feedback from members of the public, the working group recommended that the declined cases agreement process should be made more transparent,” he said.

“In this regard, Insurance Ireland are scheduled to provide a report by the end of June and annually thereafter to my department on the operation of the agreement, including on the cases submitted and resolved, and also on cases where a premium and/or terms are so excessive as to be tantamount to a refusal.”

He said the group also recommended that Insurance Ireland should provide further information on its website with regard to the recourse a consumer should have in cases where there is not a satisfactory outcome through the declined cases agreement.

“The first quarterly report on the implementation of the CIWG’s recommendations has reported that Insurance Ireland has made the necessary alterations to its website in order to provide more prominent information in respect of the declined cases agreement on the home page,” he said.

Mr Noonan also said the latest data from the Central Statistics Office indicates there has been no month-on-month increase in the cost of motor insurance during the first four months of this year, while there was a 2.6% drop in April compared with the same month last year.

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