Tougher action on insurance payouts to cut car premiums

Urgent action is needed to tackle spiralling car insurance costs, as the cost of insuring a car has already increased by one-third in the last year.

The call comes after Central Statistics Office (CSO) figures revealed that premiums were up 3.9% in March alone — which means car insurance is almost 33% higher than a year ago.

The insurance sector has said higher levels of claims, more people going to court to seek compensation, and low levels of reserves in the industry are to blame for the hike in premiums.

Managing director of Jonathan Hehir said insurers need to take stock of the impact of rate increases before throwing them at motorists.

“What is needed now is a multi-faceted approach to tackling the issues faced by motorists and insurers alike,” he said.

“We would advocate for a more sophisticated method of risk management along with the setting up of a taskforce similar to the Motor Insurance Advisory Board that was previously in place.”

Mr Hehir said more data on the real amounts being paid out on claims was needed before any further decisions on rates are taken.

“What we need now is a toughening up of the market — the Injuries Board needs to toughen up on claims and the courts need to do the same. The insurers themselves, of course, have a role to play,” said Mr Hehir.

“Aviva in particular made huge strides in identifying and combating fraudulent claims. They did this by putting in place the resources internally to go to the courts in cases where they believe the claimant is not genuine, and to pursue this person and prove the fraud.”

Dermot Jewell , policy and council adviser with the Consumer Association of Ireland, said that, as motor insurance was required by law, if motorists are struggling to afford it, it could become a “very real problem”.

“The issue here is that we are having a very one-sided debate, as it’s the providers who are detailing what the causes are for the price increases and, understandably, there is a great deal of mistrust from consumers about this,” he said.


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