A Chinese friend who is living in Ireland for many years never had a drivers licence here, but this year he has decided that now is the time to tackle it. His daughter is getting to the age where he can’t pack her on the back of his bike to bring her to school and a “taxi driver” is needed. ;-)

He studied HARD, passed his theory test and got his provisional license. He found a small car that suited him, I think it is a Ford Fiesta and then he embarked on finding an affordable insurance.

He was shocked! The first insurance company quoted him a price close to EUR 5,000! :-O He rang lots more and was constantly told that his insurance premium was so high because he didn’t have any experience. He understands that, but unless the companies allow him to drive (and an somewhat affordable insurance is needed for that) he won’t be able to improve. Tricky situation! In the end he found an insurance that “only” wanted EUR 3,500 and he went for it. So from now on, he will be working close to two months every year, just to pay the insurance. He can’t understand that.

During the week something happened that will help him to understand a little bit better: A passenger in a car got severely injured and sued the driver who drove the car she was in. The case was settled for EUR 5.75 million and THAT is one of the reasons why the insurance premiums are so high.

Unfortunately this case is not one of these “crazy settlement” cases and I say “unfortunately” because it is easier to get angry about a case where someone gets a scratch and walks away with hundreds of thousands. This case is different!

We don’t know why the woman got into the van, but it seems that there is a high probability that she knew that the driver was drunk (three times over the limit!!!) and despite that she most likely didn’t wear a seatbelt. Because of these two things the settlement was a LOT lower (about half) than it could have been otherwise. But the seriously sad thing is that since the accident (3 years ago) the woman is in a vegetative state and is still in hospital.

So the cost the insurance will have to pay are HUGE and I assume that the insurance will have to pay everything even if they might be able to claim someĀ  small amount back from the driver, but he won’t have nearly 6mio in his back pocket, so they will only get a fraction back.

On one hand we can get angry about such a crazily high payment that ultimately has to be paid by all other insured drivers through their insurance premiums. On the other hand we can certainly understand that the woman is NOT in a situation where the insurance money is a nice windfall. The money will be used to modify her home so that she can leave the hospital and then will be needed to care for her for the rest of her life. Without a doubt she and her family would prefer a situation where she wouldn’t need that money. So we can see that sometimes these crazily high premiums are fully understandable, but nevertheless they need to be paid and that is ONE reason for what makes the premiums so high.

There is another reason and that is greed or maybe even lies by the insurances. It seems to be certain (and early morning raids have taken place to secure evidence) that the insurances are paying out LESS money for claims than in previous years, but they still claim that the claims grew.