Motor insurance in Ireland

                                                      
Motor insurance in Ireland is a legal requirement for all drivers while driving a vehicle in a public place and you must produce a current Certificate of Insurance to purchase motor tax for any vehicle. Failure to have motor insurance while driving in Ireland is a very serious offence. Drivers will incur penalty points on their driving license along with having to pay financial penalties and may be disqualified from driving (more detail can be found in the section “Rules” below) if found to be driving without the required minimum level of insurance in place.

Motor insurance to protect third parties from any injury or loss as a result of the actions of the vehicle which you are driving is compulsory.  Comprehensive Insurance, covering loss or damage to your own vehicle is available at an extra cost from most insurance companies and can be taken out at the discretion of each individual driver. There is no standard cost for motor insurance as under Irish legislation the insurance company can set the premium based on the driving history and experience of the insured driver/s.

Statistics show that young drivers represent a higher risk for insurers and as such the cost of motor insurance in this age group is considerably higher for them both in Ireland and throughout the European Union (EU). There are a number of things young drivers can do to reduce the cost of motor insurance:

  • Join a parent’s insurance as a named driver as early as possible. This will enable you to establish a safety record, which can often be transferred when you want to apply for insurance in your own name. Some companies will offer discounts to young people seeking insurance in their own name if they have been a claim free named driver on another policy.
  • Get a full licence as soon as possible. Holding a full licence clean of penalty points can reduce the cost of your insurance premium considerably. Savings will likely vary from one insurance company to another, but it is possible for a young driver to save a vast amount (up to €900 or more) on the cost of his or her insurance premium simply by having a full driving licence.
  • Choose a car with a relatively small engine, as less powerful cars are cheaper to insure.
  • Drive carefully. The best way to reduce the cost of your motor insurance is to build up your no claims bonus. Again many insurance companies are offering a “No Claims Bonus” to accident free drivers with experience as a named driver on another policy held under their cover.

Motor insurance and the Equal Status Act

(Section 5(2)(d)) of the Equal Status Act, 2000 allows differential treatment in relation to the calculation of insurance policies in Ireland. This means, that insurance companies are allowed to charge higher or lower rates for policies on the basis of your potential risk as a driver. Given that younger drivers in Ireland are statistically more likely to have accidents, this explains why there can be sizeable differences in insurance costs between younger and older drivers.

Types of motor insurance policy in Ireland

The most basic insurance is “third party” and this is the minimum required by law. However, third party is only one of three main categories.

  • Third party. This is the minimum cover required by law, but it does have restrictions and limits, leaving you open to substantial loss in the event of an accident. If you are at fault, then only your passengers and the driver and passengers of the other vehicle will be compensated. This type of insurance provides no cover for injury to you or damage sustained to your car in an accident or if your car is stolen or goes on fire.
  • Third party, fire and theft. This is the most popular form of motor insurance in Ireland. It covers you for loss of the vehicle through fire or theft and for any loss as a result of attempted fire or theft. Damage to property is also covered. There are also optional extras available such as windscreen breakage.
  • Comprehensive. This is the most expensive type of insurance on the market and covers you for almost every eventuality: any damage done to the vehicle regardless of how it was incurred; life/accident insurance; loss of personal belongings from the car; the cost of a hired car if the insured car is off the road as a result of an accident; windscreen breakage, etc. With more brand new cars on the road than ever before, there has been a notable rise in people taking out comprehensive insurance. A brand new car should be comprehensively insured.

An insurance company considers many things when calculating an insurance premium. Most premiums are based on basic third party cover with the cost of extras added on. The main thing that will determine the cost of your insurance is what you actually want to be covered for. The following are always taken into account:

Licence

Whether you are driving on a full or provisional licence makes a huge difference to the cost of your motor insurance premium. You can expect to pay hundreds of euro extra, if you only have a provisional licence.

Size and age of car

The engine capacity and age of the car play a large part in determining the cost of your premium. The older the car, the more difficult it can be to insure. Many insurance companies believe that the older a car is, the more accident-prone it becomes. A new car is more expensive to replace than an old car and will cost more to insure. Likewise, the more powerful the car you drive, the more it will cost to insure.

Age of the driver

The young and the old represent high-risk categories and pay more for insurance.

Value of the car

The value of a car is taken into account for third party, fire and theft and for comprehensive insurance. What you have the car insured for, however, is not always what the insurance company will pay out in the event of a claim. In the event of the car being a write-off, the insurance company will only pay out what it feels the car is worth, which, more often than not, is less than the car is actually insured for. There is very little to gain by over-insuring a car and, equally, you should not under-insure it either.

Experience

All insurance companies will ask if you have ever had insurance in your own name before. If not, they will ask if you have ever driven under someone else’s insurance without incident. This will be taken into account when calculating a premium. Insurance becomes less expensive with experience and a clean driving record.

Profession and use

Some professions are considered to be more at risk than others and will have a loading put onto their premium. What the car will actually be used for is also taken into account. A standard policy covers the vehicle for social, domestic and pleasure purposes, but not for the carriage of goods. If the car is being used for business, then a loading will apply. If the car is being used commercially, then an even higher loading will likely be imposed.

Where the car is kept

Those living in a major city, particularly Dublin, will normally have a loading imposed. Some companies will also impose a loading if the car is not kept in a garage at night.

Excess and extras

Most insurance policies contain some type of an excess clause. This means that the policyholder is liable for an agreed amount towards the cost (e.g., the first 250 euro). The premium will cost more if this clause is taken out. It pays to shop around, because what might be considered an extra in one company (windscreen breakage, car hire in the event of the car being off the road, loss of personal effects, etc.) could be standard in another.

No claims bonuses

A no claims bonus is built up over the years and gives the policyholder a substantial reduction in the cost of his or her premiums. The ceiling for a no claims bonus is usually around 60%, leaving someone who has never had a claim with only 40% to pay. In the event of a minor accident, it is sometimes cheaper to pay for any damage out of your own pocket rather than claiming from your insurance and losing your no claims bonus. If you make a claim and subsequently lose your no claims bonus, you can build it up again in a few years. Some insurance companies will even allow you one claim without it affecting your no claims bonus.

Rules

You must have motor insurance to drive a car in your own name or as a named driver on someone else’s policy. Failure to have motor insurance or driving without insurance in Ireland is generally punishable by:

  • A fine of up to €2,500
  • Disqualification of one year or more for a first offence and two years or more for a second offence, and
  • At the discretion of the court, a term of imprisonment not exceeding six months.

In the case of a first offence of driving without insurance, the court may decide in special cases not to impose a period of disqualification or to impose a period of disqualification of less than a year.

Since 1 June 2003, where the courts in Ireland decide not to impose a disqualification, drivers convicted of a first offence of driving without insurance will incur 5 penalty points on their licence record in addition to any other penalty imposed by the court.

If you commit a second offence for driving without insurance, you will be automatically disqualified from driving. You should also note, that where a member of An Garda Síochána (Irish police force) believes that a vehicle registered in Ireland (or outside Ireland) is being used in a public place without insurance, the vehicle may be impounded.

If you are refused motor insurance

Individual insurers “have the right” to refuse you cover, but they “must provide you with a reason” for the refusal should you ask for one. However, even though you have been refused cover, you are entitled to submit an application to the Declined Cases Committee of the Irish Insurance Federation who will obtain an insurance quotation for you. In order for the Committee to consider your case you must first have sought and been refused quotations in writing from at least three insurers. This should be only be considered as a last resort option however, as the premium sought to secure any insurance in this situation will likely be very high.

How to apply

You can apply for motor insurance over the phone, in person or through a motor insurance broker. Motor insurance companies and insurance brokers are listed in public telephone directory. If you want to drive as a named driver on someone else’s policy, then that person must contact their insurance company and arrange to have you insured under their policy.

For all your insurance needs

To setup a policy to protect you and your loved ones from any financial loss due to accidental damage or loss of your property contact us at

Tel. 0818 31 30 30

E-mail: info@wexfordinsurance.com

Website: wexfordinsurance.com

Or call into us at;

Wexford Insurances
86 South Main Street
Wexford

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