asked the Minister for Industry, Trade, Commerce and Tourism if he proposes to take any measures to curb the widespread abuses associated with exorbitant claims in relation to household insurance which is contributing to the high cost of premiums to householders.
Ceisteanna — Questions. Oral Answers. - Household Insurance Claims.
8.
I am not aware of any widespread abuses of the nature referred to by the Deputy. I should add, however, that if evidence of such abuses can be substantiated it is essentially a matter for the insurance companies concerned to take appropriate measures to deal with the situation. While I would naturally be concerned about any factor which might contribute to an increase in insurance premium rates, my information is that insurance companies only pay what is considered fair and reasonable in the circumstances following an examination of the claim.
Is the Minister aware that all insurance companies do not send out assessors in respect of having a value under £1,000? Does he not have knowledge from the insurance companies that there are many abuses where household claims are concerned? Some of these complaints have been communicated to me and I shall let the Minister have them in due course. I understand this represents only the tip of the iceberg. Surely the Minister should have some information from his negotiations with the insurance companies when they come to him for substantial increases in premiums.
My Department contacted the Irish Insurance Association regarding the allegation of abuses and the association indicate that they are not aware of the widespread abuses suggested by the Deputy. It is up to the industry to manage itself. The various firms within the insurance industry should manage their own claims methods. It is in their own interests to send assessors where they feel a claim is not justified. The Department cannot be blamed if there is an abuse since the companies have a responsibility to their own shareholders to manage their affairs. I have no function in respect of the amount to be paid out on any particular claims, nor have I power to interfere in any dispute arising out of these claims. It is really a matter for the insurance companies.
It must be a matter of concern to the Minister. We are talking about exorbitant increases in premiums, due to a large extent to abuses. Householders are being bribed to claim substantial costs for small jobs. I have information about one job for which the materials cost £50, while it took only five hours to carry it out. The insurance company paid £900 and the householder was bribed not to say anything. This is happening on a wide scale. Surely the Minister must be concerned. The insurance companies are not paying these extra costs since they are being passed on to the unfortunate consumers. In the final analysis householders have to pay.
I would be very happy to receive whatever information the Deputy has. Of course I am concerned at the increase in underwriting losses under the classification of fire and other damage to property, which includes household insurance. The underwriting loss in this class grew from £10.7 million in 1983 to £12.5 million in 1984. Certainly householders are paying a very high premium and they are entitled to a good service from the insurance companies. I have been advised by the Irish Insurance Association, who were contacted by my insurance division, that they are not aware of the situation as described by the Deputy.
I regret to say that the Minister is not being advised correctly. The insurance companies, on being contacted about this matter, have said that they cannot do much about it because it would not pay them to send assessors for jobs costing less than £1,000. They are aware of the abuses and accept them because they pass on the increases to the householders. That is not good enough. It is the Minister's responsibility to take action. What action does he propose to take in the light of this question and in the light of the information I am passing to him?
I would be happy to receive any information the Deputy has. I would not like the insurance companies to be involved in carelessness in the handling of the industry and I am satisfied that they are not. It is up to the companies to manage their affairs properly in their own interests and the interests of their shareholders. The information given to me by the Irish Insurance Association indicates that the abuses referred to by the Deputy do not take place. However, I should be happy to receive his information.
Is the Minister not more careful now in accepting information from insurance companies in the light of previous experience? It is quite evident that insurance companies are not giving him accurate information. They are aware of abuses and they are not taking action because the costs are being passed on to householders and the Minister is sanctioning their applications for price increases.
This is repetition. Question No. 9.
I have to refute what the Deputy has said. I can assure him that any information he supplies will be fully investigated.