Whiplash claims cap could save motorists €150 a year

Curbing the cost of whiplash claims would save Irish motorists up to €150 on their motor insurance premiums every year, the head of one of Ireland's largest car rental companies has said.

Europcar Ireland chief executive Colm Menton says two of the State's largest motor insurers have assured him in writing that they would be prepared to slash the cost of premiums if compensation for whiplash was capped.

His comments come in a submission to the Oireachtas Joint Committee on Finance as consumers battle with the rapidly rising cost of car insurance, a development insurers have attributed to a sharp rise in awards relating to whiplash injuries.

If whiplash claims were capped at a maximum of €5,000, average premiums would drop from €700 to between €550 and €590 for most insured people, he said.

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"I believe it can be more, but to get the insurers to commit to it this is not a bad start," he told The Irish Times.

Escalating insurance costs

The Government recently set up a commission to examine compensations awards for victims of motor collisions amid concerns about escalating insurance costs. Between 70 and 80 per cent of all car insurance claims are for whiplash-related injuries, with the Insurance Ireland estimating the average payout to be about €15,000.

Europcar is the continent’s largest car hire firm. Europcar Ireland has 19 locations and a fleet of about 6,000 cars. The company also owns the State’s largest car sharing service, GoCar, which has about 150 vehicles in operation.

In his submission, Mr Menton called for the urgent introduction of a €5,000 cap on whiplash injuries, subject to insurance companies guaranteeing a drop in premiums as a result.

He also said the Personal Injuries Assessment Board (PIAB) should be given a stronger mandate to investigate cases, and urged more severe penalties for fraudulent claims.

“It’s not rocket science. What is right is right and what is wrong is wrong. These whiplash things are just crazy. If you’re badly injured, that’s fine, but there’s a huge amount of exaggeration going on and who at the end of the day is suffering? It’s the taxpayer,” he said.

In Britain, formerly described as “the whiplash capital of the world” due to the high number of related claims, the government has been considering reducing awards from an average of £1,850 to just £425 in a move that would save insurers as much as £1 billion a year.

Mr Menton said whiplash-related payouts in Ireland are currently five times higher than in Spain and Italy.

Inquiry into awards

Referring to the Government’s decision to set up an inquiry into claim awards, he questioned why there was a need for such an investigation.

“All the data needed is already available and has been for quite some time. Rather than establishing an additional commission, why not use the data to make a decision now?” he said.

Mr Menton said Europcar’s submission to the joint committee was not as an advocate of the insurance industry, “but as a very concerned insuree facing increasing premiums like any other consumer”.

He said that in addition to being hit with rises in premiums, the company was also experiencing increased legal costs.