John Lowe, The Money Doctor reports that AA Ireland has called on the Taoiseach to intervene in the motor insurance crisis and appoint a task force to sort out the ever increasing insurance premiums. They claim that some of the changes they suggest for the insurance market could see premiums cut by €80 for every driver.
AA Ireland said: “Premiums have already increased by 35% this year and it is going to need intervention at a high level if this is going to be alleviated”.
AA Ireland is possibly the largest insurance broker in the country with 120,000 drivers on its books. It recommended that a Government task force would look at a number of measures to prevent fraud, such as cutting legal costs, improving regulation, enhancing enforcement by improving technology for gardaí, and ensuring greater transparency within the insurance industry.
They have questioned the effectiveness of the Central Bank in regulating the insurance industry because the Regulator had flagged earlier in the year that it was significantly under-resourced in the insurance regulation area. An area of concern is the very high level of costs involved in motor insurance claims. Apparently, legal costs account for 60% of the costs involved for cases that have to be settled through litigation.
In terms of payments for injuries incurred in motoring accidents the payments for injuries such as whiplash average €14,000 in Ireland, but are €5,000 in the UK. The Injuries Board recently increased the personal injuries limit from € 38,000 to € 60,000. Too many insured vehicles on the road means that € 30 to € 40 is being added to every policy. Motor insurance premiums increased last year by 26.7% with a further 15% increase expected in 2016.