• Wed. Sep 21st, 2022

What is driving insurance claims through the roof?

CLAIMS Up 14% compared to 2014? Alan Murphy of Hastings Insurance Brokers. Photo: Conor McKeown

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A whopping 113% increase in claims for uninsured or unidentified drivers in County Mayo is 96% above the national average. With a net national average increase in the first seven months of this year at 17%, Mayo came in with the fourth highest increase.
Roscommon saw a 500% increase (the number of complaints rose from two to 12) while Longford and Leitrim both saw a 167% increase.
Hastings Insurance Brokers director Alan Murphy told Mayo News that, while speculative, it is reasonable to question whether this dramatic increase “is related to soaring auto insurance costs.”
“We have had cases of insurance companies quoting us € 4000 to cover an inexperienced young driver, so maybe that causes them to take risks,” said Alan Murphy.
But what is driving this ever increasing cost of premiums? While the answer is not straightforward, “high claims frequency” and relatively high payment limits are fundamental factors influencing the increase in costs. This in turn influences the competitiveness of the market, creating uncertainty for new companies that might consider entering the Irish market, says Murphy.
“On top of that, the Injury Board process is not working as it should be, given that 40 percent of rewards are rejected by claimants and therefore go through the legal process,” said Alan Murphy.
“The fact that in 2014, the ceiling for complaints filed with the Circuit Court rose from € 38,000 to € 60,000 has influenced the number of complaints, which have increased by 14% since 2014,” he continues.
Take the example of whiplash compensation: “Whiplash, which is soft tissue by nature, pays a minimum of € 14,000 in the Republic of Ireland. In the UK, this is a maximum of around € 5,000. About 80 percent of personal injury claims in Ireland relate to soft tissue. An insurer has called for a ban on whiplash claims and says we have the most expensive necks in Europe, ”Murphy said.
He quotes a recent Irish Times interview in which FBD Managing Director Fiona Muldoon made the following interesting comment: “You can either have High Court awards or cheap insurance – you can’t have the two.
Another problem, he points out, is the increase in incidents of fraud – of people staging accidents. At a recent conference Murphy attended, gardaí gave examples of where one car, for example, picks up another and applicants move into the car in the back after the staged accident to ask. compensation.
Speaking of David Fitzgerald, Managing Director of MIBI said: “Each year the MIBI (Motor Insurers’ Bureau of Ireland) handles thousands of claims against uninsured or untraceable drivers. This is the role this organization has been created to fulfill since we were established by government and the insurance industry in the 1950s.
“As a non-profit organization, all of our claims are funded by car insurance providers operating in this country with the costs ultimately covered by Irish car insurance customers. On average, the MIBI pays around 60 million euros per year for claims of this nature. We estimate that this represents € 35 in the cost of the average annual car insurance premium.
“A [average] 17 percent increase represents a significant increase in the number of complaints filed. It presents the increased payments pipeline facing MIBI. While no monies are attached to these claims yet, unfortunately more claims usually mean higher payment levels from MIBI and ultimately this will impact auto insurance premiums.
“This is why one of the main goals of MIBI is to reduce the number of uninsured drivers on Irish roads. We are working with the government, An Garda Síochána and other relevant agencies to help resolve this issue. These latest figures underscore how important this target is – not only to MIBI, but to all drivers operating in this country who are concerned about their insurance costs, ”added Mr. Fitzgerald.

Did you know?
An insurance broker will research the cheapest and most suitable insurance policy, engage with the insurer in the event of a claim and manage the process, and help clients change their policy terms upon renewal. or halfway through.

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