Cost of Claims Myth
Insurers like to put forward the notion that the cost of insurance claims is the reason why motor insurance premiums are so high in Ireland.
However, the figures show that this is simply a myth. The fact is, the cost of motor insurance claims has fallen dramatically in the last number of years while insurer’s profits continue to increase at the expense of consumers.
According to figures released by the Central Bank, the cost of claims which is measured as a percentage of premiums fell from 94% to 59% in the last 5 years. That is a fall of almost 40%, which is a dramatic fall in the cost of claims. At the same time the cost of motor insurance premiums continues to rise year on year.
Distilling fact from fiction
The motor insurance industry would have you believe that the increase in claims, particularly personal injury claims, is the reason premiums are so high.
This is clearly not the case. The facts speak for themselves:
- Fact 1: motor insurers profits for Ireland rose by 9% last year to €142 million.
- Fact 2: the overall number of motor claims has fallen by 45% in the last decade
- Fact 3; the number of motor accident related personal injury claims fell by 25% over the same period
- Fact 4: the cost of dealing with claims has fallen by almost 40% in the last 5 years
- Fact 5: motor insurance premiums have increased by almost 35%
The findings of the Central Bank’s most recent report on motor insurance reveal what we all suspected to be the case, that insurance companies continue to make significant profits, despite complaining about claims, and insurers are failing to pass on the benefits of the significantly lower cost of claims to motorists.
What is telling from the report is that motor insurers would prefer claimants not to seek legal advice before making claim. The figures revel that more than 50% of claims are settled directly with claimants, which is a worrying statistic. Insurers for the most part are multi-national corporations with significant financial resources. When settling a claim directly with claimants the parties are not equally met and the balance of power is very much on the side of the insurer.
The advantages of seeking legal advice when dealing with a motor claim include:
- expert advice from someone with considerable experience in dealing with motor accidents
- an expert who will deal directly with third party insurers on your behalf
- an expert to take the hassle out of dealing with a motor accident claim
- an expert to fight your corner and make sure you are properly compensated for your loss, quickly and efficiently