‘The Government needs to stand up for policyholders' – backlash as motor insurance premiums to keep rising
Drivers have seen motor insurance premiums rise for more than a year-and-a-half, with premiums up by more than 8pc in the year to May alone.
Now the Alliance for Insurance Reform says the increase in claims would push premiums even higher.
This is because the Central Bank said the cost of settling claims was 23pc higher in the first half of last year when compared with the previous six months.
'This is primarily driven by an increasing trend in both the number and cost of damage claims,' the Central Bank's H1 2024 Private Motor and Liability Mid-Year Reports show.
When compared with pre-Covid times, the cost of settling injury claims is down 16pc. This was driven by a fall in the number of claims settled.
The fact that the cost of settling motor damage claims shot up by 23pc in six months meant there was no justification to increase the official guidelines on award levels further, the Alliance said.
T he cost of settling motor claims went up 23pc in just six months
The Judicial Council has proposed that personal injury award guidelines should be increased by almost 17pc.
Justice Minister Jim O'Callaghan is to bring a memo to the Cabinet next Tuesday, paving the way for draft legislation that would give effect to a planned rise in award levels.
The Alliance said: 'T he cost of settling motor claims went up 23pc in just six months – now is not the time to increase these costs further.'
The Central Bank report also shows that there is no financial benefit for claimants to have their case taken away from the State's Injuries Resolution Board.
Injuries claims can be litigated if a settlement from the board is rejected.
The Central Bank's report found that the average award paid by the board and one that is litigated both come in at €24,000.
Legal fees for cases settled through the Injuries Board average €597. Litigated cases have average legal costs of €24,786.
The Alliance said this needs to be specifically addressed in the Government's forthcoming action plan for insurance reform.
Alliance board member Tracy Sheridan said: 'The increase in awards will raise premiums further and adversely impact the volume of claims settled at the Injuries Resolution Board.
We are already seeing month-on-month premium increases
'The Government has not said a word about the planned increase [in the award guidelines] for the last six months and there has been no opportunity for public debate either. This is wrong.'
Ms Sheridan said that if the Government increases award guideline levels by 17pc, there will be no check on costs.
'We are already seeing month-on-month premium increases as the cost of living continues to spiral out of control.
'The Government needs to stand up for policyholders, not make things more difficult for them,' she said.
The Central Bank also released a report on business liability insurance, showing claims were down 10pc in the first half of last year compared with the previous half year.
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