Posted: September 3rd, 2013
Insurance companies have claimed that new limits on car accident compensation will lead to higher premiums following the introduction of the Courts and Civil Law (Miscellaneous Provisions) Bill
The Courts and Civil Law (Miscellaneous Provisions) Bill 2013 – previously known as the Courts Bill – will increase the upper limits on car accident compensation that can be awarded in the District Court from €6,384 to €15,000, and in the Circuit Court from €38,000 to €60,000
On publication of the report in July, Justice Minister Alan Shatter said that the changes would lead to reduction in legal costs due to fewer car accident compensation claims going to the High Court; however two insurance experts have warned that the Bill could add as much as 30% to car insurance premiums.
Thousands More Cases in the Courts
According to Ciaran Phelan – CEO of the Irish Brokers Association – and Ken Norgrove from Zurich Insurance, the Seanad passed the legislation without considering the implications of insurance costs – which both claim will encourage more plaintiffs to “have a go” at taking their claims for car accident injury compensation to court, rather than settle their claim without legal action.
Mr Phelan said “These changes will see thousands more cases reach the courts this year, which obviously will increase the legal costs for insurers [and] which will in turn be passed onto consumers. There will be no getting around this”.
“Those amounts are too high”, agreed Mr Norgrove, who claimed that the new limits on car accident compensation will only encourage more claims and a return to the “compo culture” of previous years. “The Personal Injuries Board was great for straightforward and uncontested injuries but people will now take their chances in the District Court”.
A Smoke Screen for Insurer´s Own Troubles?
The latest attack on the new limits on car accident compensation settlements came a day after several insurance companies announced that insurance premiums were likely to rise due to an underwriting gap between the funds they receive in insurance premiums and what they have to pay to settle car accident injury compensation claims.
Whereas it is not unusual for car insurance companies to make an underwriting loss, they have normally been able to rely on investment income from funds they have on deposit. However, the return on investment has fallen in recent years while at the same time car insurance companies have been involved in fierce competition which has reduced their income from car insurance premiums.
Categories: Car Accidents, Passengers in Car Accidents, Road Traffic Accidents, Whiplash Accidents