Drivers are being “taken for a ride” by insurance companies increasing premiums despite the fall in the cost of claims.
The Alliance for Insurance Reform is warning that it is starting to see motor insurance premiums creep up again, despite the success of the judicial guidelines on personal injury.
Figures from the Personal Injuries Assessment Board (PIAB) show the value of the average award has dropped by over 40% since the guidelines were introduced in 2021.
Central Bank figures released last year, however, show that motor premiums only fell by around 2%.
On Newstalk Breakfast this morning, Alliance for Insurance Reform Director Peter Boland said even those small reductions are already being eaten away.
“What we’re starting to hear from ongoing research we are running over the last few months is that premiums are starting to drift upwards again,” he said.
“Now, it is an indication at this stage; I wouldn’t say it is a substantial trend. But if that is happening, that would be unconscionable.”
He said politicians and officials “moved mountains” to introduce the reforms the industry assured them would lead to a fall in insurance premiums.
“That was a deal in terms of the morality of this,” he said. “That insurers must pass on the benefits.”
“If it is the case that motor insurance premiums are starting to drift up again, then clearly Government are being taken for a ride on this.”
The new guidelines for both the courts and PIAB were introduced in 2021 – leading to a sharp drop in payouts.
The most recent PIAB report highlighted a 38% drop in payouts between January and June last year when compared to before the guidelines.
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