Fianna Fail has promised to jail drivers who make false or exaggerated car insurance claims, in an attempt to cut rising premiums.
Michael McGrath, the party’s finance spokesman, also proposed doubling the home carers tax credit to €2,000, cutting capital gains tax to 25 per cent and increasing the capital spending budget by at least €1.5 billion over the next five years.
Last week, a survey by AA Ireland found the cost of insurance rose by 50 per cent for one-third of motorists last year. The motoring body warned that premiums will continue to rise in 2016, unless major reforms are put in place by insurers and the government.
Mr McGrath said the rise in costs is partly due to a corresponding increase in the frequency and number of claims being made. Fianna Fail’s manifesto promises legislation to tackle false and exaggerated claims.
“We would introduce statutory sentencing guidelines to ensure custodial sentences are applied in serious cases of motor insurance fraud,” he said. “Suspended sentences have not proved to be an adequate deterrent and false claims are adding significantly to motor premiums.”
The Fianna Fail manifesto also promises to reinstate the Motor Insurance Advisory Board, which was set up by Mary Harney, a former tanaiste, in 1998, to monitor the costs in the industry, and evaluate the factors influencing the change in premiums. The board’s term of office ended in September 2004.
Conor Faughnan, director of consumer affairs for AA Ireland, welcomed the pledge of tougher penalties for insurance fraud. “There should be punishment for people who choose to commit an act of perjury to try to get a big payday in court, and at the moment, there really isn’t much of a downside,” he said. “You can tell the wildest exaggerated tales and lies, and take your sob story to court, and it feels as if the very worst thing that can happen to you is you don’t get a payday.
“Custodial sentences might be a bit extreme. But I do think it’s important for there to be more consequences than are there at the moment.”
Mr Faughnan said that while false claims were one reason for rising insurance costs, they were not the only issue. AA Ireland has called for reforms in the technology and resources used by gardai and the insurance industry to enable them to spot insurance fraud more quickly. “I’m not convinced we need the problem diagnosed again, by reconvening the Motor Insurance Advisory Board,” he said. “We just need to implement the solutions. Otherwise there’s a danger of paralysis by analysis, spending another two years waiting for the board to tell us what we already know.”
Fianna Fail is proposing a number of other measures aimed at reducing the cost of living and forcing companies to compete more effectively for customers’ business.
It has pledged to double the €1,000 home carers tax credit, which is available to a family where one parent is at home caring for a child or an elderly parent.
It would increase capital spending by €300m a year above the €27bn plan recently agreed by government for the five years.
It has also proposed a requirement that the state legislate in response to the recommendations of the Competition Authority and the National Competitiveness Council; an obligation on energy companies to advise customers when a discount period has ended; and rules to ensure that professionals such as solicitors, barristers, dentists and medical doctors post prices for their services on the relevant regulator’s website.