Why is it that of all the sectors in our economy that have
representation in government is it that there is a dedicated junior minister
for financial services and insurance? The man in the hot seat is one of 2 local
junior ministers; Michael D’arcy, the other being Paul Kehoe who is effectively
Minister for Defence.
The insurance industry here is a pale shadow of what it once
was. A few years ago I rang around a
number of car insurers looking for a quote only to be told that I’d already been
given a quote that day by an affiliate and they weren’t going to give me a
different price to what I’ d already received. Few insurers will take policies
on motor bikes, just a handful cover health insurance in an industry tat is
seen by many customers as money for old rope. Insurance is already subject to
regulation with both an insurance and financial services ombudsman. So just what
does Michael D’arcy bring to the party?
Few areas of economic activity get the full access to a
dedicated minister. What makes insurance more important than fisheries? Fisheries now forms part of the title of
Agriculture minister under the marine portfolio and has gone way down the
pecking order. At a time when there seems to be a permanent trolley crisis not
to mention a shortage of housing, why is there no trouble shooting junior
minister sent to expedite the chaos there?
Nothing personal against the minister but it seems that
instead of insurance cost being driven down on behalf of the customer, it is
the companies who seem to have him singing their song. Minister D’arcy wants a
referendum to limit payment of compensation in courts to those found to have
suffered whiplash. I’d love to see that wording! The constitution guarantees
the independence of the courts. That independence means that a victim must be
fully compensated by an insurer or person responsible for injury.
There is a myth pedalled by the insurance industry that
every claimant is a chancer, that judges haven’t a clue when it comes to
compensation and that this drives costs to insurers sky high. Minister D’arcy wants to cap awards made in
court to those who suffer whiplash as a result of car accident. The inference is that whiplash isn’t a real
injury. It’s as if there should be a
price list for injuries suffered and to be compensated for.
Let’s be clear about it. Most claims made arising from car accidents
are resolved without going to court. The medical evidence is often clear and the
cost to the victim is quantifiable. The insurance industry down through the
years has got successive governments to remove juries from compensation cases,
reduce the number of Senior Counsel in a case among other changes. All were at
the time claimed to be the silver bullet to reduce insurance costs. Penalty
points, garda road traffic corps also introduced to reduce the number of crashes. This, we were
told would lower claims with a knock-on reduction in premiums.
What in fact happened was that we got rationalisation in the
insurance industry and less competition meaning that premiums never went own at
all!
But guess what? The penalty
points and speed cameras worked. Today we find out that despite the number of
cars doubling on the road in the last 20 years, a 40% higher population, cars
making more journies than ever, we have the lowest number of road traffic fatalities
and less accidents and injuries than when records first started. Yet car insurance
is still as high as ever.
I once served on a jury in the High Court. We listened to a
case taken by a middle aged motorist who was so badly injured that he had to
give up work. It was our job to decide how much he should get as compensation.
We sat for a week watching and listening carefully. During the many
applications that were made that required us to exit to the jury room, we discussed
the matter. Yes the motorist had to be compensated but he had not been wearing
a seat belt so had to take responsibility for his injuries. Most of us reckoned
he was 50% responsible for his injuries.
Imagine how I was gobsmacked to hear that after a week the
case was settled out of court for £100,000 plus costs late one evening? This
sum was way beyond anything that the jury had considered and it was done at the
behest of the insurance company.
We don’t need a referendum on interfering with court
decisions in the interest of insurers. What we need is for Minister D’arcy to
direct the insurance industry to reduce premium and to pass on to their policy
holders the benefits of safe driving on the roads. Otherwise Minister D’arcy’will
be more worried about backlash than whiplash!
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