On the old adage that every cloud has a silver lining, there are hints that even the ill wind of Covid 19 might – just might – offer a little respite to the country’s hard pressed motorists. In the wake of yet another scathing report into the workings of the motor-insurance industry, there have been understandable calls from motorists that the Covid 19 lockdown should lead to reduced motor premiums.
The level of motor claims – the driver of the soaring cost of insurance – is expected to fall by 20 percent over the next two years as the lockdown restrictions mean reduced traffic levels on the country’s roads.
Whether the apparent logic of such a development will work its way down to the pocket of the individual motorist is, however, a moot point. The insurance industry – as last week’s report from the Central Bank notes – is not given to the notion of passing on reductions to the customer. On the contrary, motor-insurance premiums have actually gone up a third over the last decade, despite the costs of claims per policy actually coming down.
The Alliance for Insurance Reform, the body that campaigns for a fairer deal for motorists, pulls no punches when it comes to criticising its avowed adversary. The motor-insurance crisis, it says, is driven by a greed that enriches insurance companies, brokers and lawyers at the expense of the Irish motorist.
It is a charge refuted with faux-hurt by those it is aimed at. The legal profession pleads that blaming the lawyers is a red herring designed to lay the blame on those who are doing no more than providing a service to motorists who find themselves as litigants in motoring-injury cases. The insurance industry itself pleads that its business is a cyclical one with the sort of volatility that can only be provided for by means of increased premiums.
Defensible or not, most observers would agree that the legal profession is the big winner from the claims culture that exists among the motoring public, leading to the not unreasonable charge that motorists themselves are helping to drive up premiums because of their fondness for litigation. Although it is shown that those settling a claim through the Personal Injuries Assessment Board work out equally as well as those going through the courts system, there is an instinctive tendency to opt for the legal route.
The subject of motor-insurance reform is one that has long been debated, but with little to show by way of practical action. It has been a constant presence in political party manifestos over many years, but the appetite for meaningful change quickly slips off the government agenda.
The most recent development has seen the establishment of a Cabinet Committee sub group to tackle the issue, whose first stated objective is to secure a substantial reduction in the level of damages for personal injuries to bring us into line with European norms. This, it is hoped, will lead to a parallel cut in the amount of legal fees, which at present add a huge amount to case settlement costs.
In the meantime, the Insurance Alliance is seeking more transparency as to how motor premiums are calculated, and the process by which insurance companies settle claims, often without the knowledge or consent of the policyholder against whom the claim is initially made.
It also calls for a claim-by-claim register, open to public inspection, where individual awards can be examined and doubtful claims flagged.
However, given the clout of the vested interests for whom motor-insurance claims are a lucrative line of business, that objective may take some time to achieve.