Dáil Éireann Debate, Tuesday - 13 July 2021
272. Deputy Darren O'Rourke asked the Minister for Finance if his attention has been drawn to the fact that persons will lose their no-claims car insurance bonus if a third party makes a claim for a relatively small amount against them, for example, for a scratch, resulting in the insured party paying thousands of euro extra on their premium each year; his plans to address this problem; and if he will make a statement on the matter. [37571/21]
View answerAt the outset, it is important to note that neither the Minister for Finance, nor the Central Bank of Ireland, has any influence over the pricing or provision of insurance products, as this is a commercial matter assessed on a case-by-case basis. This position is reinforced by the EU legislative framework for insurance (the Solvency II Directive).
On a general level, my understanding is that insurers will use a combination of rating factors in making their individual decisions on whether to offer cover and what terms to apply. For example, in relation to motor insurance, factors may include those such as: the age of the driver and the relevant driving experience; as well as the age and type of vehicle; how the vehicle is used; the claims record; the number of drivers; and the location of storage. Insurers also price in accordance with their own past claims experience, and do not all use the same combination of rating factors, so as a result prices vary across the market. This is why it is important for consumers to shop around when it comes to renewal.
More specifically in relation to no claims bonuses, my officials contacted Insurance Ireland for more information on the matter. It indicated that the administration of no claims bonuses is a matter for each individual insurance provider. The amount of discount offered, and the terms and conditions attached to same will vary according to the customer, policy, the nature of the risk and the provider. Insurance Ireland also noted that ‘step back’ and ‘protected’ no claims bonus/discount products are available in the market. It is important for a policyholder to review their policy documents in detail to understand the cover that they have in place in relation to no claims bonuses/discounts.
Where a consumer feels that they are being treated unfairly, they have the option of making a complaint to the Financial Services and Pensions Ombudsman (FSPO). The FSPO is a statutory official who acts as an independent arbiter of disputes which consumers may have with their insurance company or other financial service provider. The FSPO can be contacted either by email at info@fspo.ie or by telephone at 01-567-7000.
Finally, it is also worth noting that Insurance Ireland operates a free Insurance Information Service for those who have queries, complaints or difficulties in obtaining insurance, and it can be accessed at feedback@insuranceireland.eu.
