Insurance costs must fall from Monday, campaigners demand

THE cost of insurance must start falling from next week, campaigners have demanded.

The Alliance for Insurance Reform said the implementation of new guidelines on the level of awards comes into effect from the weekend and it expects the cost of motor and liability insurance policy renewals to drop significantly.

Last month, the Judicial Council approved guidelines that will mean payouts for whiplash will be more than halved and many other awards for less serious and middling injuries will be reduced even further.

Minor injury claims make up most of the cost of compensation, with insurers long arguing that lower claims costs will lead to lower premiums.

Director of the alliance Peter Boland said: “Monday next, 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.”

He said the new guidelines, signed off by the Judicial Council in March, do not deliver the 80pc reduction in minor injury damages that it said is necessary to bring Ireland close to comparable jurisdictions.

But at an estimated 50pc reduction, it is still significant, he said.

“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.”

Industry body Insurance Ireland said it welcomed speedy implementation of the new guidelines and said they are a very important step that will help to reduce costs over time.

“While competition law prevents us from commenting on future pricing in the market, we are optimistic for the future of insurance in Ireland.”

It said the last time Ireland got to grips with costs with the establishment of Personal Injuries Assessment Board in 2004, insurers responded positively and consumers benefitted.

“In addition, individual insurers publicly committed to passing on savings arising from meaningful reform at a Joint Oireachtas Committee hearing in 2019.”

Insurance Ireland said the new guidelines should ultimately result in personal injury claims being processed more efficiently and consistently.

“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,” it said.

Most insurers have promised Junior Finance Minister Seán Fleming that they are prepared to lower premiums from June onwards.