asked the Minister for Industry and Commerce if his attention has been drawn to the difficulties at present being experienced by prospective self-drive car hire companies in relation to prohibitive rates of car insurance; and if he will make a statement on the matter.
Written Answers. - Car Insurance.
92.
A report submitted to me on 21 March 1988 by the Car Rental Council of Ireland set out the difficulties being experienced by self-drive car hire companies in relation to, among other things, the high cost of motor insurance.
I replied in detail to the council on 15 April 1988.
I am fully aware of the adverse impact which the high cost of insurance can have on all sections of the community, including the car rental industry and I intend to do everything practicable to solve these problems wherever possible. The high cost is largely attributable to the number of accidents, the levels of claims arising and the associated legal and other expenses involved. In 1986, the latest year for which full figures are available, insurers sustained underwriting losses of £18 million on their motor accounts. Therefore, the challenge is to reduce the number of accidents and the number and cost of claims so as to minimise insurance premia.
Significant measures to tackle these problems are already in train. The reduction of high insurance costs is an integral part of the Government's Programme for National Recovery. The Government are moving quickly to facilitate a reduction in costs, by proceeding with legislation to abolish juries with effect from 31 July next, to limit the level of legal representation in personal injury cases and by promoting greater awareness of the need for road safety. The scope for promoting the publication of a Book of Quantum of Damages, and for introducing a pre-trial procedure system to help reduce legal costs is also being examined. Insurance industry representatives have given assurances that reductions in insurance premia will follow the introduction of an improved framework.
Insurers experience the car hire business as a high risk activity, particularly where renters are tourists who are not accustomed to Irish roads, driving conditions, e.g., right hand drive, and other environmental factors. The premia quoted by insurance companies to car hire firms reflect the inherent risks involved. Until there is an improvement in insurance companies' underwriting experience in this sector, problems of cost and availability will persist.
I recognise that the car hire sector is an important component of the tourist industry generally. If any company has a particular problem in relation to insurance cover for its fleet it should contact the insurance section of my Department with the details. I can assure the Deputy that every possible assistance will be given in such cases.