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MOTOR INSURANCE PREMIUMS were largely unchanged in the first half of 2023 despite soaring claims costs.
There was a 0.5% increase to €561 in the first half of 2023 when compared to the year previous, and there has been a decreasing trend since the second half of 2017 when the average premium was €730.
This is against an increase of close to 20% in settled claim costs across the industry to €358 million in the first half of 2023, when compared to the 2015-2019 half year average.
Over the same period, there’s been a 21% decrease in injury claim costs but a 126% increase in damage claim costs.
However, in the first half of 2023, damage claims took 0.4 years to settle, compared to 3.2 years for injuries.
This means it will take longer for trends in injury claims settlements to emerge when compared to damage claims.
The report also highlights the impact of the personal injury guidelines introduced in 2021 on claims settled through the Injuries Resolution Board (IRB), formerly known as the Personal Injuries Assessment Board.
Throughout 2015-2019, the average compensation paid to a claimant for claims less than €100,000 stood at €22,026, but in the first half of 2023, this dropped to €16,361.
The average compensation when going the litigation route for claims less than €100,000 was €24,037 over the period from 2015-2019, but this dropped to €20,453 in the first half of 2023.
However, the legal costs associated with both are starkly different.
The legal costs associated with the IRB route is €564, compared to €17,837 for the litigation route.
The Alliance for Insurance Reform said this shows that “the only ones that benefit from settling though the litigation channel are the legal profession”.
While Brian Hanley, chief executive of the Alliance for Insurance Reform, noted that some cases dealt with through litigation may be “contentious” and require “additional expertise”, he added that “it’s highly unlikely a majority of them fell within this bracket”.
There is also a significant time gap in settling claims – the average time taken to settle claims through the IRB was 2.7 years, compared to 5.2 years for claims settling through litigation.
Hanley said claims process through the “injuries assessment board rather than litigation is quicker, more efficient, and ultimately the awards are on average coming out just about the same”.
He added that competition in the insurance market is resulting in the slight increase in motor insurance when compared to rising damage claims.
Hanley also noted that rising damage claims are partly “due to inflation in terms of the cost of labour and the cost of repairs”.
Meanwhile, Insurance Ireland said the “sharp increase in damage claim costs and the continued pattern of claims going the litigated route” is a “worrying trend”.
Insurance Ireland CEO Moyagh Murdock said “successive reports have shown that the litigated channels still account for the vast majority of claims costs”.
She said this is “despite the fact that litigation is slower and doesn’t actually deliver better outcomes for claimants, with most of the additional cost going to legal fees”.
She added that this “highlights that the strengthened role of the Injuries Resolution Board to increase settlements through mediation and without unnecessary litigation is critically important”.
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Absolutely nobody was on the roads for the bed party of 2 years during COVID and car insurance still went up …its nothing to do with claims
@and the hit’s just keep coming: Ah simpler times. No need for rushing around, we had a brief glimpse of what life could be like before running back to congestion like addicts.
@and the hit’s just keep coming: claims take 2 to 4 years to process
Is anything ever done right in this country. Really.
@reg morrisey: price hikes and tax increases usually take effect by 12 pm the night they’re announced.
@reg morrisey: We (they) make so much money from not doing it right that its part of the human process., keeps people in jobs and constantly repeating the same thing.
The laughing part is if you don’t have a claim you’re insurance goes up every year. If you’re involved in an accident or claim and you’re not at fault it goes up. When you get a quote or renewal they ask have you been involved in an accident regardless of blame? then load you automatically again.
@Paddy C: the best part is when your insurance company pay out a claim they will give you an offer where you can pay them back so that it doesn’t affect your policy!!
Time to bring back higher claims.
since they were reduced insurance prices have gone up.
@Argus Romsworth: Why do the call it “No Claims Bonus” when your premium goes up every year, even if you have no claims. Back in the seventies, if you didn’t have a claim, your premium was reduced every year. There was an incentive not to make a claim.
My insurance went up last month, 27yrs no claims, points or disqualifications. Asked why it went up by quite a considerable amount, was told because alot of claims been made in my area!!!!! Went online on my insurance Web page and put all my details in and got it even cheaper than what it was last year….
@6gRrQtLn: There is no such thing as loyalty anymore. They see you as a sucker if you stick with a company.
Should be higher penalties for false claims
Corporate Gr€€€€€€€€€€d
Yes, and notice how the cost of living is somewhat easing so, costs rise in other areas. You will see more of this…
Strange how so many costs seem to be going up since the local elections. Bin charges, insurance , proposed hotel tax, proposed property tax increase in Dublin, etc. Not a mention of these before the elections. No government protection from the councils or government as usual.
Barristers should have to pay the court costs when dirtbag false claimers lose in court.
@Paul: Or more realistically have a counter claim by the state. False claiming is attempted fraud is it not?
Of course what really needs to happen is a review of the legal profession from top to bottom, a profession where not being caught in a lie is the same thing as telling the truth.
All insurance is fraud.
Yep lets lift the cap on claims again or maybe double payouts
I’m not an economics expert or a crook (is there a difference?) but I believe it’s called “dynamic pricing ” aka ripoff .
A huge issue these days and I’m sure it will get worse going forward, Is that when a bulb goes in a headlight, the whole light unit has to be replaces. I have a merc and to replace a front unit, the cost price is at least €1800 just to buy. A tail light unit is over €500. I pity anyone who bought a car with a led strip light across the front like a golf or the large lighted grill on the hyundai. Nothing is to be fixed on cars now and replacement costs are wild
@big john: How do the car manufacturers justify that in terms of sustainability? Of course it’s all about profit.
@Bert Carolan: the daylight running led strips are just one example. You can’t open a car door these days without some motorised part popping the flush handle out to get a grip of. These designs are pointless
Can everybody stop buying really expensive cars and just drive dirt boxes so that nobody will have expensive claims thanks very much!!
@Fiona Wyse: Stop being poor. Problem solved.
@Alex: Lol I’m not poor. I just have sense and I see the value in keeping a decent car going.
More good news for less well off which now adays is lots us.
It’s all unnecessary nonsense when you really look into the illusion we sold and so many believe.
Rise Slightly!!!! Mine went from 380 to 550.
Car is kept on private property, in a garage, has an alarm and tracker, garage is also alarmed.
Insurance in Ireland is nothing short of a rip off. No way are they able to say that it’s down to increased costs, injury awards are down and profits are growing…
Gouge central.
@sin rise : you just keep your tongue firmly inserted between the cheeks of the government’s behind!!!
Having read the comments under this article, it is clear to see that so many of the contributions are from uneducated simpletons.
@Sun Rise: says you, after your comment on another thread yesterday…mother must of dropped you on your head on purpose as a child
@6gRrQtLn: your comment just reinforces Sun Rise’s post– must of,obviously lack of attention during English class.
It’s best to be quiet when you don’t understand
What would happen if everyone just didn’t pay their car insurance? Pros and cons. And not just the obvious points….
“Slightly”? Mine increased over €100 despite zero claims for 24 years!
have your say