An article in today´s Irish Times reports on concerns that insurance companies offering fast settlements may result in a lack of competitiveness, higher premiums and the settlement of false or exaggerated claims.
Writing in the Irish Times, Brian Byrne provides some interesting analysis of the accident compensation sector, and reports a 22 percent increase in the value of compensation settlements in the first 6 months of the year – up to €144 million compared with the first six months of 2013.
Byrne´s analysis reveals that, although the average settlement of a personal injury claim remained practically unchanged at €22,000, the number of motor liability claims resolved increased by 24 percent, while the number of public liability claims that were settled rose by 30 percent, and the volume of claims made against an employer for an injury at work was 10 percent higher than in 2013.
The large increase in the number of settled injury compensation claims – and the increase in the total amount paid out in injury compensation – has been attributed to a spike in claims made during 2013 which were settled within the first six months of this year. However, the Irish Times article also comments that accident victims should beware of insurance companies offering fast settlements.
According to Byrne, an estimated 40 percent of claims are settled “behind closed doors”. His article says that private agreements between insurance companies and claimants have the potential to result in a lack of competitiveness, higher insurance premiums, and the potential for false or exaggerated claims to be settled without a proper investigation of the claim.
However, Byrne´s article omits to mention the growing trend for “third party capture” – an insurance industry term for when an insurance company lowballs an injury victim with a compensation settlement lower than what they are entitled to in return for a fast settlement. Insurance companies offering fast settlements to injured parties can result in financial hardship for the injured victim, while the insurance company rejoices in higher profits.
One potential solution that could resolve concerns about private settlements of compensation would be to integrate a register of settled personal injury claims with the government´s new “Benefit Recovery Scheme”. As insurers now have to obtain a certificate of benefits from the Department of Social Protection before they can settle personal injury claims, it could be possible for the Department to register the value of the claim.
In this way, there would be visibility of how much each claim is settled for, so that business leaders no longer have to worry about a lack of competitiveness, higher insurance premiums, and the potential for false or exaggerated claims to be settled; and so that accident victims have a source of information in order that they no longer have to beware of insurance companies offering fast settlements.