IT WAS a wintry night when a pedestrian stepped out in front of Mr S's car and was run down. Gardai and an ambulance arrived, and took the unfortunate young woman to hospital where she was treated and then released that evening.

Mr S was badly shaken, and though he made an initial statement to the gardai on the scene, he was not asked to make a formal statement and was not charged with any driving offence. Mr S and his wife contacted the hospital to hear the victim had not been kept overnight. Nothing more was heard about the case until recently, when their motor insurance renewal notice arrived, indicating that their comprehensive insurance had risen from Pounds 400 to Pounds 1,625.

Mrs S writes: "We were delighted at the time that the young woman was not badly hurt and were relieved that we had comprehensive insurance. As it turns out she has made a personal injuries claim against us.

"We haven't had much satisfaction from the insurer, who told us that while there is a personal injury case against us we have no choice but to pay the extra premium since no one else will touch us. When you have an accident you expect to lose your no-claims bonus, but is this excessive loading common practice?"

We contacted the Irish Insurance Federation Information Service motor section which told us that drivers involved in such an accident can expect to lose all or a part of their no-claims bonus when personal injury is involved, but a high loading of premiums occurs when a claim, usually in excess of Pounds 25,000, is lodged (or paid out) against the driver.

Mr S's insurer - who has since been in contact with our reader - told us that a portion of the extra premium the S's were now being charged had to do with a technical matter regarding the use and location of the vehicle since the original contract was drawn up with our reader. The bulk of the extra premium he said related to the size of the claim against Mr S.

However, the company is conducting a major investigation into the claim and while unable to discuss the particulars, we were told that if the claim is unsuccessful, or is dropped, Mr S's premiums will revert back to their (adjusted) preclaim level.

Motor insurance claims result in huge cost implications for drivers and companies and the common practice of settling personal injury actions even when the driver is clearly not at fault adds not just to the cost of insurance for everyone, but the sense of unfairness that many drivers feel. In our reader's case, he has not only lost his no-claims bonus, but also his peace of mind.

"It's not a question of no-blame, but no-claim", says one insurance official. The cost of contesting a personal injuries claim is enormous and unlike the US, for example, insurance companies here are reluctant to go after a pedestrian who, for example, may have contributed to the accident by jay-walking.

Theoretically, it is possible for a motor insurer who has paid out in a case like this to try and recover the award by claiming against the personal injuries cover many people have in their home and contents insurance contracts.

The theory, it seems is rarely put into practice and most recovery of award cases are made between motor insurers, the most common being when one car collides with another and the insurer of the "victim" claims the damages it has paid out from the insurer of the offending driver.