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'The insurers always win' - association hits out at rebate offering

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Minister Paschal Donohoe

Minister Paschal Donohoe

Collins Dublin, Gareth Chaney

Minister Paschal Donohoe

Motor insurers have been accused of "insulting" their policyholders by offering small rebates.

Motorists insured with Liberty Ireland are to get back 15pc of their premium for two months, subject to a minimum of €10.

This means that if a driver is paying €700-a-year they will get back less than €20.

The company said it would issue what it called "cash-equivalent vouchers".

Reluctant

This is likely to be in the form of a voucher for a petrol station.

The approach is being looked at as it is too expensive to issue cheques and some customers are reluctant to share bank details.

Customers can opt to have the refund paid to a charity that supports front-line workers.

Axa plans to give a rebate to customers that is expected to be up to €30 for each motor policy, and likely to be paid as a cheque.

It is understood AIG is to lower its premiums rather than offering rebates, a move that would discourage shopping around.

Chairman of the Consumers' Association Michael Kilcoyne accused the industry of giving back too little.

"It is an insult to offer so little back to drivers, given that the risks for insurance companies have reduced. The insurers always win," he said.

He questioned the usefulness of an insurer offering to lower renewal premiums, which he said would discourage drivers seeking out better value across the insurance market.

Liberty said its response to the Covid-19 pandemic, which has led to a huge drop in traffic volumes, will cost it €5m.

A number of insurers have committed to refunding motorists and lowering premiums after pressure from Finance Minister Paschal Donohoe.

It comes after similar moves in the US and from one of the leading insurers in Britain.

Liberty Ireland said its policyholders could claim a "cash-equivalent voucher", or they can donate the money to a charity working with front-line workers battling the virus.

Chief Executive of Liberty Insurance Tom McIlduff said: "We recognise that these are exceptional circumstances and now is a challenging time for many of our customers.

"We also recognise that risks on Irish roads are reduced in light of current restrictions."