Whiplash a pain in the neck for insurers
AIG wants Ireland to ban whiplash claims to counter soaring motor insurance costs.
Average premiums are approaching €1,000, driven in part by the dramatic rise in whiplash claims and increased payouts.
Eight in 10 motor insurance claims in Ireland are for whiplash, according to Kevin Thompson, chief executive of Insurance Ireland. That compares to just three per cent in some other countries.
One consequence is an increase of more than 30 per cent in policies renewed in the first two months of this year.
Kevin said there were many causes driving the rise in insurance costs; fraudulent claims add €50 to every car insurance policy while the frequency of insurance claims is increasing at the same time as the level of awards by the courts had increased by 14 per cent.
He said, ‘I’m not saying the courts are an easy touch when it comes to whiplash claims but as a society we need to decide what is the level of compensation that we want to give people. If we want to have reasonable awards for people in accidents then they should be compensated at a reasonable level.’
Policies are expected to continue rising.
Kevin said, ‘We need to take the volatility out of the market. If we can take that out of the cost of claims, reduce the level of awards for whiplash, keep legal costs down, then we potentially have a chance of stabilising claims.’