Personal Injury News

Insurers drive a hard bargain with motorists

CAR insurance premiums in Northern Ireland are the highest in the United Kingdom - mainly because of higher payments for personal injury claims.

Industry sources say that this is because in the past juries set the level of damages. Jurors no longer decide on awards but the legacy of their generosity persists.

When an injury claim is settled, some 40% of the insurers' outlay goes on legal costs, which are also higher than in Great Britain.

Dennis Storey, a partner in Abbey insurance brokers, said: "If we wish to pay the same premiums as our counterparts in Great Britain, then we have to accept the same lower court awards over there. It is a simple equation."

The rate at which drivers claim for personal injuries has been increasing across the UK, but Northern Ireland has a particularly high claims rate.

Mr Storey said: "It is happening in a majority of accidents now. In the past, people wanted their car fixed after a crash. Now they sit there and say their neck hurts."

Additionally, the rate of serious accidents is marginally higher in Northern Ireland than in many other parts of the UK.

"We have fairly severe accidents here, possibly because of the country roads which are often good quality but which allow fairly high speeds," said Mr Storey.

"In London you are more likely to be looking at accidents in slower traffic where the costs are lower. And in much of Scotland the population density is low so accidents are rarer."

Some of the lowest premiums are in Scotland, where claims are less frequent. Also, a tight legal system there controls awards and costs.

There are other factors which push up premiums, but they tend to affect all parts of the UK to a similar extent.

Despite car hijackings and joyriding in Belfast, theft rates are not significantly different to comparable cities in Great Britain.

High car repair costs are another factor in pushing up premiums acrossthe UK, as are bogus claims and uninsured drivers.

Insurance companies are trying to tackle such problems, including building up a register to identify serial claimants.

From the Belfast Telegraph 30 October 2003



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*Where replacement vehicle costs can be recovered from the insurance company of the person who caused the accident. Where this person is untraceable or uninsured, or where there is a dispute over liability, a replacement vehicle cannot be provided.