Insurance companies have been accused of “taking motorists for a ride” by increasing premiums despite massive drops in the costs for them of settling claims.
The Government introduced new judicial guidelines which led to lower levels of damages for insurance claims in April 2021.
The average injury award plunged by 40pc after the guidelines were introduced, putting pressure on insurers to dramatically cut premiums.
Insurers have repeatedly said they will pass on lower costs from reforms in the form of lower premiums.
But the Alliance for Insurance Reform said that despite the huge fall in the cost for insurers of settling claims, motor premiums are again on the rise.
Director of the Alliance Peter Boland said: “In recent weeks we are starting to get more reports of private motor insurance premiums increasing on renewal.”
He said it was “unconscionable” that premiums would rise rather than fall sharply.
Guidelines setting out lower award levels for minor injuries were expected to lead to much cheaper insurance.
The most recent report from the Personal Injuries Assessment Board (PIAB), the average personal injury award by PIAB between January and June 2022 was €14,786, some 38pc lower than before the guidelines were implemented.
But Mr Boland has accused insurance firms of failing to pass these on to motor insurance policyholders.
“Irish liability insurers have ignored the massive reforms put in place by Government and continue to increase premiums, and there are early indications motor insurers may now be doing the same.
“If that turns out to be the case, then they are taking the Government and Irish motorists for a ride.”
Mr Boland said it may be that car repair costs are increasing, due to higher general inflation. But car repairs only account for a third of motor insurance claims, he said, quoting Central Bank research on motor insurance costs.
“The vast majority of claims costs are personal injury costs, and these are plummeting.”
Motor insurers are also set to benefit from new legislation that came into operation this week aimed at reducing the number and costs of personal injuries claims.
Under the measures, claimants who go to court after rejecting an assessment by the PIAB of the value of their claim will not recover their legal costs and may face paying the other side’s costs if the court ultimately awards them a lower amount than the PIAB assessment.
PIAB will also have more time to assess claims where an injury has yet to settle, and will also assess claims of a wholly psychological nature.
It will be an offence to supply false information to PIAB, and the legislation empowers PIAB to disclose information to gardaí. Asked about reports of motor premiums starting to rise, despite benefiting from reforms, Insurance Ireland insisted prices were falling.
The lobby group said Central Bank statistics for 2021 shows that motor premiums fell by 17pc in the four years from the fourth quarter of 2017 to the fourth quarter of 2021.
“When combined with CSO headline economic data, which showed a 10pc reduction in the year to Q4 2022, there has been a reduction of 27pc in the last five years,” it said.
Insurance Ireland said falling premiums published by these independent sources provide clear evidence that the reforms are starting to work and consumers are benefitting, while seeing rising costs in many other areas of the economy.
Recently a survey found that misplaced loyalty to the same insurer is costing motorists up to €300 a year.
A failure to switch insurers and get new business discounts means people are overpaying, the survey found.
