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Innocent motorists in serious road accidents 5 years ago still 'haven't seen a cent'

Some drivers who have been out of work since their accident have yet to receive their insurance payout.

It’s a nightmare, an absolute nightmare. It’s not fair to leave people’s lives in limbo. This is an urgent consumer issue.

SOME MOTORISTS WHO were in serious road accidents more than five years ago are still waiting for insurance payouts, according to Fianna Fáil’s Michael McGrath.

The cases are linked with the Maltese-regulated Setanta Insurance, which collapsed in April 2014.

Over 1,600 claims - worth up to €95 million - are still outstanding.

The insurance firm was wound up almost three years ago with the Motor Insurance Bureau of Ireland (MIBI) urged to step in after the company went belly-up.

The bureau’s principal role is to compensate victims of crashes caused by uninsured and/or unidentified vehicles. However, MIBI did not provide funds for stranded Setanta claimants.

The case is currently before the Supreme Court, which will decide who should pay the money due to these customers.

The complainant (the Law Society of Ireland) is arguing that there was an agreement that the MIBI would pay out if a member became insolvent. However, the MIBI says the State-backed Insurance Compensation Fund (ICF) should pay the Setanta bill.

The industry’s ICF, which can pay out up to 65% of a sum due to a policyholder, has been severely strained since the collapse of Quinn Insurance in 2010. Following the insurance company going under, a 2% levy was imposed on insurance customers to bump the fund back to a healthy level.

Out of work

“I know a number of those [Setanta] cases myself personally, people who were involved in serious crashes as far back as 2012; people who have been out of work since; people who have suffered very serious injuries who are thousands upon thousands of euros out-of-pocket,” McGrath said today.

It is a nightmare for people caught up in the [collapse]. People have not worked since 2012 and 2013, they haven’t got one red cent and the State is standing over that situation. There is no clarity as to who pays the final bill and we all know, ultimately, it’s motorists who will end up paying the final bill. So we need to deal with it.

Aside from those directly impacted by Setanta going bust, McGrath said all Irish motorists have seen their insurance premiums rise in the aftermath.

The Fianna Fáil finance spokesperson said this is why his party will tomorrow move a motion in the Dáil calling for the Insurance Compensation Fund to provide the necessary resources to the Setanta Liquidator to deal with the outstanding claims.

Lives in limbo

“It is not good enough to leave people hanging in limbo like that with their lives being completely put on hold,” he said.

McGrath said his party’s motion will provide clarity on who is responsible for costs that may arise if another insurance company collapses in Ireland.

It also calls on the Central Bank to conduct an awareness campaign so that consumers are better informed about who regulates the motor insurance firm their policy is with.

In a separate development today, the regulator published the outcome of its inspection of motor insurance providers, which assessed how insurers are treating claimants when processing and settling their claims.

Inspection

To better understand consumers’ experience and overall satisfaction with the process, the review dealt with feedback from the initial contact with their insurance providers through to the settlement (or not) of their claim.

A number of areas where firms need to improve were identified.

The research found that while 74% of claimants agreed that the claims process is carried out fairly by the insurance company, when prompted on specific issues, 53% of claimants said they were dissatisfied with at least one aspect.

In some cases, policyholders were not informed of settlements paid to third-party claimants which could potentially impact on their future insurance contracts, and even result in the loss of all or part of their no claims bonus.

Commenting on the review, the director of consumer protection Bernard Sheridan said:

Making a claim following an accident can be a stressful and difficult time for consumers and it is important that insurance companies ensure they help consumers through the process.

Read: ‘If you’re over the alcohol limit, you’re over the limit’: Ross wants more support for drink-driving law>

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