Cost of renewing motor insurance expected to drop by more than 20%
DUBLIN: Under the new guidelines on personal injury awards recently approved by the Judicial Council, insurance reform campaigners say the cost of renewing motor and liability insurance will be significantly reduced from Monday. At least a reduction of in excess of 20% is expected.
The Personal Injuries Assessment Board, which evaluates all unsettled claims, will also act in accordance with these guidelines. “We believe the need for expensive litigation will diminish over time and as a result will unclog the Courts as the Personal Injuries Assessment Board will also operate under these new guidelines,” said Insurance Ireland.
“Monday next, 26th April, the first working day following the implementation of these new guidelines, is D-Day. From this day, we expect the cost of motor and liability insurance policy renewals to drop significantly,” said Peter Boland, Director of the Alliance for Insurance Reform. The revision in the guidelines is expected to reduce minor injury claims by 50%.
“Insurance premiums are based on future risk and every accident that happens from Monday and the majority of claims already made will be subject to the new guidelines, so the risk associated with every new motor and liability policy in Ireland will drop significantly and that must be reflected in the cost of those policies,” said Mr. Boland.
The Central Bank analysis found that 42% of motor policy expenses were due to compensation payments. The Alliance says the legal costs associated with such claims, broker commissions and re-insurance costs are all likely to be reduced by at least 20%.The insurance industry will be committed to reducing premiums in line with the personal injury guidelines.
However, it is unclear how quickly or to what extent it would benefit consumers and businesses. The government has also urged insurers to transfer the savings.
While not commenting on future pricing in the market, Insurance Ireland said it is optimistic about the future of insurance in Ireland.
When the Personal Injury Assessment Board was set up, insurers responded positively to cost matters and benefited consumers. “In addition, individual insurers publicly committed to passing on savings arising from meaningful reform at a Joint Oireachtas Committee hearing in 2019,” Insurance Ireland stated.
“The new Guidelines, which we note are mandatory, should ultimately result in personal injury claims being processed more efficiently and consistently,” it added.
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