- Cost of settling motor claims went up 23% in just 6 months so now is not the time to increase these costs further.
- Awards are higher here than virtually anywhere else – who does the government think will end up paying for it all?
- No excuse for liability insurance premiums not to come down for business, sports, community and voluntary groups as the cost of claims continues to reduce.
- Report also makes clear there is no justification for so many claims being settled in litigation as it does not benefit the vast majority of claimants.
Yesterday’s NCID report from the Central Bank (1) makes clear the government’s looming increase in personal injury awards (2) couldn’t come at a worse time for policyholders.
The report found that the cost of motor claims rose by 23% in the first 6 months of last year, with the increase being attributed to an increase in the volume of motor claims and a steep rise in the cost of damage repairs caused by inflation. Commenting on today’s report Tracy Sheridan, owner of Kidspace play centres in Rathfarnham and Rathcoole and Board member of the Alliance said: ‘The only bright spot had been the reduction in the cost of injury awards and now the government is set to increase these by 17%. If this happens 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.’
‘The increase in awards will raise premiums further and adversely impact the volume of claims settled at the Injuries Resolution Board (5). The government has not said a word about the planned increase for the last six months and there has been no opportunity for public debate either. This is wrong.’
The Central Bank also released its NCID liability report for H1 2024. The picture here is markedly different to motor. Reflecting on the report Tracy Sheridan said “there really is no excuse for liability premiums not to come down for business, sport, community and voluntary organisations as the cost of claims continues to reduce. Today’s report shows the cost of settling liability claims is down a further 10% in just the first six months of last year, making ongoing premium increases impossible to justify.”
The Central Bank report also finds no benefit for claimants settling their cases outside of the Injuries Resolution Board and in the litigation channel (3). Awards in both channels average €26,000, however the overall cost of settling the claim increases significantly when legal costs are accounted for in the latter. For cases under €100,000 (94% of claims), legal fees rise from €597 at the Injuries Board to €24,786 in the litigation channel (3). This is something that needs to be specifically addressed in the government’s forthcoming action plan for insurance reform.
