Insurers warned to pass savings on personal injury to consumers
Insurance companies have been warned not to undermine the new personal injury guidelines by settling claims for higher amounts.
Minister of State at the Ministry of Finance, SeÃ¡n Fleming, has called on insurers to comply with compensation guidelines and pass the savings on to consumers. The guidelines came into effect in April after being approved by a Judicial Council vote.
Under the plan, minor whiplash injuries, which account for the bulk of claims, have been reduced by up to 50 percent.
However, there is a question mark as to whether insurers will actually implement the new lower guideline award levels in cases they resolve on their own.
About half of claims are settled directly by insurers, the rest being settled by the Personal Injuries Assessment Board (PIAB) or by the courts.
Mr Fleming told a fraud conference at Insurance Ireland: “It is essential that insurers do not undermine the guidelines by settling claims at higher amounts for the sake of speed or ease.”
It comes after a Central Bank report showed auto insurance companies made huge profits in the pandemic’s first year.
A spokesperson for Insurance Ireland insisted its members are committed to the new personal injury guidelines.
They added that insurance companies have accepted 90% of the settlement decisions taken by PIAB since the new directives came into force. But depending on the type of claim, less than half were accepted by claimants.
âThis combination creates a lot of uncertainty to the detriment of the insurer and all insured businesses and individuals,â the organization said.