There are fears that motor insurance costs could rise by over €40 for every motorist because of a High Court ruling on the collapsed Setanta Insurance.
The court says that a fund run by existing insurers, the Motor Insurance Bureau of Ireland, should be responsible for claims made against the collapsed Setanta Insurance.
The fund usually deals with claims worth around €60m a year and results in an extra cost of €30 per premium.
However yesterday's ruling means the fund will have to cover claims against Setanta, which could be worth €90m.
The move could also mean that some insurers will be forced to pull out of Ireland altogether.
The Irish Times Consumer Affairs Correspondent, Conor Pope, says the real worry is if another huge company declares itself insolvent.
Conor spoke to Vincent Wall on Down to Business this morning about the situation now facing consumers and insurance companies in Ireland.
"This could be a one off hit - the MIBI will pass on the cost to individual motorists, that almost goes without saying," he explained. "But what happens if a bigger insurance company declares itself to be insolvent? The hit will be much, much larger."
Michael Horan of Insurance Ireland, which represents the Irish insurance industry, says the ruling could see premiums rise by €45 or more:
