A Bill tabled by Fine Gael Senator Anthony Lawlor to cap the level of insurance pay outs for personal injury claims has passed second stage in the Seanad.
The Bill received widespread support and will now go to committee stage.
The Kildare Senator said the Civil Liability Act 2019 will help to reduce premiums for motorists.
Senator Lawlor said: “According to the second Motor Insurance Key Information Report (2016) the vast majority of claims inflation comes from smaller third-party injury claims, the cost of which increased at an average rate of 7.3% per year, up 42% in total from 2011-2016.
“Third party injury costs per claim are £11,000- £13,000 in the UK compared to €40,000-€60,000 in Ireland. The most frequent claims are mainly soft tissue or “whiplash”. (Insurance Ireland, 2018)
“The average premium in Ireland was €998 in 2018, according to the AA. The average price paid for motor insurance in the UK was £477 down 1% on the previous year.
“According to the CSO, the average motorist still pays about 30% more than in 2015.”
Senator Lawlor continued: “Insurance costs must be kept at a reasonable and affordable level. Increases in the cost of insurance and in particular the rising costs over the last four to five years are a real issue for people and businesses.
“Reducing the cost of living and business costs is a priority for me and this Bill aims to achieve this by moderating the size of claims payed for general damages.
“The excessive awards currently being paid for soft tissue injuries are having a direct impact on the cost of insurance.
“Up to 70% of insurance premiums are claims related. I believe that awards should better reflect the level of injury suffered. We must review the Book of Quantum and make changes that reflect the link between awards and insurance costs.”
Senator Lawlor said: “Latest figures indicate a 42% rise in pay-out costs between 2011 and 2016; this is not sustainable and has to be moderated immediately.
“Businesses are closing everyday due to the high cost of insurance. Play centres are under particular pressure and are forced to seek insurance in the UK.
“Brexit puts that option in serious jeopardy. In 2018, 75 community festivals across the country had to abandon plans due to extremely high insurance costs.”
Senator Lawlor concluded: “Capping claims will encourage more insurers into the market and make claiming less attractive, discouraging fraudulent activity.
“I want to put money back in people’s pockets and protect jobs and businesses and this Bill is an important part of this process.”