Is dual-pricing ripping you off? What can you do about it? My thoughts on the current state of the insurance market.

Sinn Fein TD, Pearse Doherty, this week raised the issue of dual-pricing by motor insurance providers. He gave the simple example of him applying his details when looking for a new quote and getting a much cheaper price than that offered on his renewal quote.

This is an exploitative practice which takes advantage of you and punishes your loyalty. Here's the kicker, they're all doing it. You can shop around and maybe get a better deal with someone else but you can be guaranteed in a year or two you'll be facing the same situation. The trouble is, there isn't enough competition in the Irish insurance market to really combat their ability to exploit you. Because it's law, you have to get your motor insurance from a very select group so the threat of you taking your business elsewhere doesn't exactly hold water because someone else will be stepping in to pay the premium you've just declined. It is, even without the intent, a cartel.

It's a never ending merry-go-round that few in government seem willing to put the brakes on. The way I see it, there are three options that those in power could go for.

1. Increase competition. This is the most obvious one but requires a major cutting of the judicial and out-of-court awards. Getting more companies into the market gives consumers more choice and will enforce a form of self-regulation. Foreign companies, however, are put off the the absolute chaos that is the Irish insurance system at the moment. Who in their right mind would want to set up a new insurance business here given the enormity of our court awards?

2. Open up the EU market. We can buy clothes, tech and food from across the EU, why not include insurance in that as well? Insurance costs, particularly motor insurance, are much cheaper on the continent. Simply allowing us to purchase from Spain, Germany etc could be a potential option. The trouble with it? Insurance is a financial product and would require synchronising our financial markets with our EU neighbours. Given the ongoing battle surrounding our corporate tax rate, I can't see our government TDs going anywhere near it.

3. Change the insurance system entirely. This would require a constitutional change and therefore a referendum, but it could be done. We could implement a system of insurance whereby the basic level of insurance (third party) is paid for out of general taxation or a levy on fuel. It would require a governmental insurance department to run it and resolve claim issues etc. In effect a public-owned insurance company. Private companies could offer supplementary products like fully-comp insurance which motorists would no longer be obliged to purchase.

The third option would be my preference. Given that motor insurance is required by law, I think it is only right that those who apply the law offer the coverage. Private companies are driven entirely by profit. Normally I have no issue with that, but when you force your populace to purchase their product, it lends itself to exploitation. The initial argument against this would be job losses. The insurance companies would threaten cuts etc. But if done right, those jobs would simply be moved to the public sector rather than the private sector. Also, given how many companies are closing these days due to the ridiculous public liability insurance prices, if we expand this system of insurance to incorporate this, it would lead to an increase in jobs instead.

This system would require constitutional change to enact, but it can work if the political will is there.

If you're reading this, I ask a simple favour of you. Please email your local TD, their email address can be found at https://www.whoismytd.com. If you wish, simply forward this article to them and ask that they look it over.

Does dodgy suit by TD point to greater societal issue?

By now we will all have seen the case being brought to the courts by Fine Gael TD Maria Bailey following her fall from a swing in a Dublin hotel. I, as have many of you reading this, have been rightly outraged at the case. Given the intense focus on fraudulent and exaggerated insurance claims in the media, it was shortsighted of her at the very least, arrogant at worst,  to proceed with such a frivolous suit.

Since the story first broke, I've seen hundreds of comments on social media regarding it. Not a single one in support of her case, all outraged at an elected representative contributing the ongoing insurance crisis. Many decrying the fact that a TD feels she should have been "supervised" while using a swing, something most of us master by the age of 4. She has been condemned in the strongest of terms and rightly so. Our elected representatives have to be held to a higher standard than the rest of us in my view. Herein lies the issue.

The "rest of us" are the ones driving this compo culture. We are the ones who permit this culture to fester and grow. I have seen people being congratulated after a minor car accident in advance of a guaranteed windfall. I've seen people encouraged to get a solicitor after tripping in a shop.

"Sure you may as well for the few quid" is the justification for it. It's easy to see the appeal. How can people not be tempted by an almost guaranteed €20,000 for a minor bump on the road? How could we not have our head turned by such a windfall?

I myself have seen the temptation. Last summer I fell and dislocated my knee in a bar, spent the night in A&E and a month in a cast. I was encouraged by others to take a suit against them. Knowing the insurance market like I do, I know I would have got a sizeable payout had I pursued this. Of course, given my history, it would have been highly hypocritical of me to do such a thing. I did wonder however, had I not been so heavily involved in the insurance campaign, would I have been tempted? I'd like to think I have enough integrity that I would have accepted the fall was my own fault either way. But the lure of an extra 5,10 or 20 thousand euros is not easily resisted for many.

We all know these claims add to the problem. But when it's brought down to an individual level then it's rare we see the woods through the trees. We tend to think of ourselves and what we can gain in the here and now when these "opportunities" are presented to us. At that moment, the greater issue doesn't register with us. All we think of is the chance to pay off some debts or go on holiday. When we're presented with these outrageous figures for minor incidents that don't or didn't have any major impact on our lives. It's easy money really.

That being said, those dishing out the rewards are more to blame in my view. It's not even the size of the rewards in most cases that irks me. It's the laughable cases that are deemed deserving of them. If you've been hit by a car and end up with a broken arm or other similar injury, fair enough. In this case, you should definitely claim and if it's €20,000 or €30,000 you get then fine. However, if you slip on a floor, or fall off a swing, high awards for such a thing cannot be tolerated. We need our laws to acknowledge that accidents are sometimes just that, accidents. There is not always someone to blame.

We cannot expect that people will stop looking out for themselves. This compo culture is too far gone to expect it to sort itself out. It needs to start at the top. Award levels and frequency simply have to be reduced, there is no alternative any more. There is no silver bullet that will sort out this insurance crisis but this would be a damn good place to start.