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New laws come into force today that will improve the rights of consumers and businesses when purchasing insurance policies.
The changes include a new 14-day cooling off period for clients who sign certain new insurance contracts.
Insurers will also not be able to resolve third-party claims without the policyholder’s knowledge and will have to engage with the customer on the claim, even giving them the opportunity to present relevant evidence.
The insurance company will also have to notify policyholders of the result of the claim, including the amount for which it has been settled.
Nor will it be possible for an insurance company to reject a claim on the basis that it is considered that a claimant does not have or has not had an insurable interest in the object of the contract.
The law also sets a limit on the amount of a claims settlement offer that an insurer can hold or hold until repairs have been completed or invoices have been produced.
The Consumer Insurance Contracts Law became law in January, but only now do the first parts come into force.
This is because the insurance industry took more time to implement the provisions of the law.
The rest of the act will not begin until next year.
Among these measures will be a requirement for the insurer to ask the relevant questions when a consumer or company contracts a policy, reversing the current status quo that places the burden and responsibility on the consumer to voluntarily provide information.
Insurance companies will also need to inform clients what they paid in premiums during the last five years, as well as any claims paid to clients and third parties during the same period.
The laws will also make it difficult for an insurer to avoid paying valid claims for reasons that have nothing to do with the accident or loss suffered by the insured.
The legislation was first introduced to the Dáil by Sinn Féin finance spokesman Pearse Doherty more than three years ago.
But it took until last December to pass all the stages in the Oireachtas.
Mr Doherty and those campaigning for insurance reform have criticized the Finance Minister’s decision not to start some parts of the legislation until next year, saying that reform is needed now.
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