The Government is to set up a new commission on personal injury claims in an attempt to bring insurance payouts following car crashes into line with international standards. It is hoped lower compensation payments will lead to reduced motor insurance premiums.
The Personal Injury Commission will particularly focus on payouts for soft-tissue injuries, such as whiplash, which have risen substantially in recent years.
Whiplash accounts for up to 80 per cent of all motor insurance claims, with payments ranging up to €19,400 for minor cases where there is full recovery within about two years. The comparable payment in the United Kingdom is a maximum of €7,600.
For severe whiplash cases, the Irish compensation payments are up to €77,900 while the corresponding UK figure is €24,244.
The move to set up the new commission is expected to be announced by Minister of State for Finance Eoghan Murphy in the coming weeks following the completion of an official report on tackling the high cost of motor insurance. The report is expected to have made about 40 recommendations in nine key areas.
Grading injuries
It is understood the commission will grade injuries to ensure a greater consistency in claims payments, leading to lower claims for smaller injuries.
It is hoped an examination by the commission of insurance compensation payments in other countries will help to bring down Irish payouts and lead to lower premiums, although the commission will not be able to enforce reductions in charges.
It is also hoped lower payouts would reduce the number of claims lodged for smaller injuries, in particular whiplash.
The new process will be separate to the existing guidelines for injury awards listed in the so-called “book of quantum”.
The most recent book of quantum was published by the Personal Injuries Assessment Board last month, the first such publication since 2004. It compiled information on claims payouts in Ireland in 2013 and 2014 using figures for 51,000 closed personal injury claims in that two-year period.
The book of quantum does not take a view on payouts, but merely reflects “prevailing compensation levels”. It has been criticised for not offering international comparisons.
Speaking in the Dáil last week, Mr Murphy said consumers must “be able to see how increases in premiums are calculated and have more power, not only to shop around but also to understand and have faith in the operation of the market”.
He added: “It is hoped that even before recommendations come online that this certainly will help them to at least put a stop to increases in premiums. Then, as the recommendations work their way through, we should see some of those costs come down.”
