Swann Presents Ministers with Practical Steps for Tackling High Costs of Car Insurance

Robin Swann MP has outlined practical steps to address the high costs of car insurance and has urged the Justice Minister and Treasury to take action.

The South Antrim MP has said:

“The high costs of car insurance, an essential cost for every driver, remains a significant pressure on Northern Ireland’s motorists. Every driver should be able to access car insurance at a reasonable cost and this is an issue that I am continuing to find solutions to.

“Recently, I submitted a number of recommendations to the Government’s new Car Insurance Taskforce which I am pleased to say they are looking at as part of their review, but in addition to this I have also written to Justice Minister Naomi Long MLA and Chancellor Rachel Reeves MP with practical steps which can be taken to reduce the motor insurance burden in Northern Ireland.”

In a letter to the Justice Minister, Mr Swann has urged the Minister to adopt an online injury claims management portal like that in operation in England and Wales. This portal would allow drivers to lodge claims for personal injuries following road traffic accidents, up to a value of £5,000, without needing to go court.

Claimants register their claim on the portal. The compensator, usually the at-fault driver’s insurer, investigates the claim, and communication between the parties is managed through the portal. If the claimant does not accept the compensator’s offer, or the compensator rejects the claim, they can make three counteroffers after which if the parties don’t reach agreement, and only at this point the claimant can start legal proceedings.

By adopting a similar portal for Northern Ireland, or for Northern Ireland to be included under the current provisions in place in other parts of the UK, the backlog court system will no longer be bogged down by minor injury insurance claims, and with reduced legal costs for insurance companies – drivers should see a real term decrease in their premium costs.

Additionally, the South Antrim MP has asked the Treasury to address the significant gap in consumer protection facing NI drivers that is resulting in higher consumer costs, namely the lack of regulation of claims management companies.

Unlike in England, Scotland and Wales, Claims Management Companies in Northern Ireland are not regulated by the Financial Conduct Authority. Northern Ireland has more CMCs than the rest of the United Kingdom and according to the Association of British Insurers, they can add additional costs of between 15% and 30% of a total claim by taking a percentage cut of the compensation payment that does not reach consumers. This contributes to the high insurance costs for NI drivers.

Mr Swann called on the Chancellor to extend the FCA’s regulatory remit to Northern Ireland.

The UUP MP said:

“These are practical and pragmatic steps that both the Department of Justice and Treasury can take to actually address these high insurance costs. This issue requires action to be taken – and these two proposals could serve as the first steps in a better deal for drivers.”