Motor insurance costs 'could rise by €40 due to Setanta ruling'

There are fears that motor insurance costs could rise by over €40 for every motorist because of a High Court ruling on the collapsed Setanta Insurance.

The court says other Irish insurers will have to cover the cost of claims against Setanta, worth €90m.

The move may mean increased premiums for every Irish motorist, and could also force some insurers to pull out of Ireland altogether.

Insurance Ireland, which represents the industry here, said it was an unfair ruling for its members, which are likely to be passed onto consumers.

Spokesman Michael Horan also said the ruling would make insurance so unattractive that many insurers operating here might simply decide to pull out.

"Insurance companies can invest in markets throughout Europe and the world. They're not going to invest in the Irish market if they're presented with a scenario (where) they're potentially on the hook for the losses of the least prudent insurance company in the Irish market," he said.

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