The exaggeration of insurance claims by motorists is a much bigger problem than fraudulent claims, Minister of State Michael D'Arcy has told an Oireachtas committee.
The insurance industry had “huge” problems with exaggerated claims, fraud, and excessive payouts, Mr D’Arcy told the Oireachtas finance committee on Thursday.
Mr D’Arcy, Minister of State with responsibility for financial services and insurance, said average motor premiums had fallen by more than 20 per cent. The Oireachtas committee was discussing the issue of premium costs in the insurance industry.
Sinn Féin finance spokesman Pearse Doherty said motorists were being "fleeced" by the cost of insurance. Mr Doherty said the Government had refused to play "hard ball" with the insurance industry over the problem.
Mr Doherty said he had come across one case, where a haulier operator’s insurance premium increased from €32,000 to €120,000 over three years. “In anybody’s books that is somebody who is being fleeced by a market which is operating like a cartel,” he said.
Mr D’Arcy said it was “easy to pluck an individual figure out” which showed
an increase in the premium cost, but the average trend of costs was down.
“We’ve a huge problem with fraud, we’ve a huge problem with exaggeration, we’ve a huge problem with high awards. That’s where the real problems are within the insurance sector,” Mr D’Arcy said.
“In my view the issue of exaggeration is a much larger issue than the actual number of fraudulent claims,” he said.
Mr Doherty criticised the lack of prosecutions for those who attempted to make fraudulent insurance claims.
“We’ve heard from the industry and others, we know that there are no prosecutions, when the courts are finding very clearly that claims are fraudulent, they walk out the door,” Mr Doherty said.
In July, Insurance Ireland announced the industry group would fund a dedicated Garda fraud squad, to tackle bogus insurance claims. Mr D’Arcy defended the funding of the unit from the private sector.
“I support it. I don’t support it being paid for by industry . . . but if Insurance Ireland wish to pay the money into the Exchequer, and the Exchequer passes that to the gardaí, I’m 100 per cent behind that,” he told committee members.
