Car insurance

If you drive a car or keep it on a public road in Ireland you must have at least third party car insurance. It is a criminal offence to drive without car insurance.

Types of car insurance
What to think about when choosing insurance cover
How premiums are calculated
Tips on cutting your insurance costs
No claims bonus
What insurance companies should tell you before buying insurance
Refused car insurance?
Is my car insured abroad?

Types of car insurance

There are three main types of car insurance:

  • Third-party
  • Third-party, fire and theft
  • Comprehensive

Third-party

This is the minimum legal requirement needed to drive a car in Ireland.  It only pays out for claims that other people make against you for damage or injury you cause to them. Third party cover is not widely available from insurance companies in Ireland.

Third-party, fire and theft

With this cover, in addition to third-party cover, you can claim for loss or damage to your own car as a result of fire or theft (attempted theft is also covered), but not accidental damage to your vehicle. This type of cover costs more than basic third-party cover.

Comprehensive

This gives you third-party, fire and theft cover but also allows you to claim for damage to your own car, no matter who is to blame. You can expect to pay more for comprehensive cover than for third-party, fire and theft cover. The benefits of comprehensive policies vary between insurance companies, so you should check the policy for full details. Some of the benefits that may come with comprehensive cover include:

  • Windscreen and glass cover. Some insurers are now imposing excesses here.
  • Cover for damaged or stolen personal belongings. This usually applies to items stolen from a locked boot or glove compartment. This is not standard cover and you will need to check the policy schedule or policy document for details.
  • Recovery service and emergency breakdown assistance. This may not always be a standard cover, and the age of the vehicle could have a bearing on this being offered.
  • Replacement or hire car – the cost of this may be covered if your own car is off the road as a result of an accident and usually for a short time only.
  • Driving other people’s cars – this covers you for any damage you do to another car or person while driving someone else’s car. It does not cover any damage to the car you borrowed or personal injury to you if you cause an accident. Note: This excludes cars owned by the insured or their partner. There are restrictions with certain insurers based on C.C. of the other vehicle, it must be taxed and have a valid NCT and some insurers require that it has valid insurance in place on it. Some insurers will also give comprehensive cover on the borrowed vehicle but with some restrictions.
  • No claims bonus protection or step back protection.
  • Named driver on car. You may want to insure someone else to drive your car, such as your son or daughter. As a named driver they will be covered under the policy.
  • Open driving – allows anyone with a full driving license to drive your car with your permission.
  • Driver personal accident cover – means the driver can receive compensation for death or serious injury suffered as a result of an accident they are responsible for.
  • A common misconception is that comprehensive cover will cover your medical expenses and injuries if you are injured in an accident. This is not always standard and there may be very limited cover in place. You will need to check this with your insurance provider.
Top Tips
  • When choosing car insurance, always check what it does and does not cover. The policy offering the lowest cover does not always mean the best value for your needs.
  • As most insurance policies include an ‘excess’ you should always check how much it is. The excess is the first part of any claim you must pay which is usually up to a few hundred euro. You will not be able to claim for amounts less than the excess. The higher the excess, the lower your insurance premium should be.
  • Most Personal Contract Plans’ (PCPs) terms and conditions strongly recommend that you take out comprehensive car insurance.
Examples of when you might choose different car insurance policies
Kate paid €2,000 for her car and picks a third-party, fire and theft policy. She feels the cost of comprehensive insurance is not worth it as the car is only worth €2,000. However, there have been a number of car break-ins on her street lately so she wants fire and theft protection.
Julie has just bought a car for €15,000. She chooses a comprehensive policy to insure it, as she would not be able to afford to replace the car if she had an accident that she caused herself. She also has seven years’ no claims bonus and wants to protect this so she adds no claims bonus protection to her policy.

The table below explains the level of protection given by each type of insurance:

Third party

Third party fire and theft

Comprehensive

Claims by another person as a result of damage caused by your car:
Damage to their car

Y

Y

Y

Damage to their property e.g. wall or bicycle 

Y

Y

Y

Personal injury

Y

Y

Y

Claims by you:
Damage to your car as a result of fire or theft

N

Y

Y

Theft of items from your car

N

N

Y

Note: you will need to check your policy document as this is not always offered.

Damage to your property, for example, wall, fence etc.

N

N

Y

Personal injury

N

N

Y

Note: you will need to check your policy

What to think about when choosing car insurance cover

  • You should get quotes from a number of insurance companies or use a broker – you can use our car insurance shopping around checklist.
  • If using a broker ask how many quotes they look for. Will they charge a fee and if they offer other services, for example, help with making a claim
  • What type and level of cover best suits your needs? If your car is old or low in value think about whether comprehensive cover is worth the extra cost.
  • Ask what each policy covers, the exclusions and the amount of the excess.
  • Are there any discounts being offered by each insurance company?
  • Think about whether you should protect your no claims bonus.
  • Ask about any restrictions on the policy, for example, if only named drivers are covered.
Top Tips
  • Always give the insurance company accurate, up-to-date and relevant information when taking out the policy and also if something changes during the policy, for example, if you change your car. If you are not sure whether the information is relevant, contact the insurance company and let them decide.
  •  Insurance companies use this information to calculate your premium and to make a decision whether to pay out on any claims you make. Also if you do not disclose all the information they ask for, they can cancel your policy and it may be difficult in the future to get cover from other insurance companies.

How is your premium calculated by insurance companies?

Insurance companies use a number of factors when calculating insurance premiums:

  • driving experience (including whether you have a provisional or full license)
  • claims history
  • where you live
  • type of car
  • age of car
  • your age
  • occupation
  • what you use your car for
  • type of cover required

Tips on cutting car insurance costs

Tips on cutting costs More information
Shop around and bargain
  • Get quotes from a number of insurance companies, including your current one
  • Ask your current insurance company for a discount
  • Use our car insurance shopping around checklist
  • If you get a good quote it is usually worthwhile to see if another insurance company is prepared to match or better it
Think about how you buy your insurance
  • Many insurance companies offer discounts when you buy online
  • If using a broker find out how many quotes they will look for and if they charge a fee
Pay your insurance in one go
  • If you pay by monthly direct debit you will usually be charged interest (this is often a separate credit agreement). This will increase the overall cost of your insurance
Get the right level of cover
  • If your vehicle is old or low in value, consider whether a comprehensive policy is worth paying for. But make sure you get the cover you need
Get your full licence
  • You will be charged more if you have a provisional licence, so try to get your full licence as soon as you can
Try to be as realistic as possible when estimating the value of your car
  • If you have a claim, the insurance company will only pay what they consider to be the current market value of the car. So you need to ensure you value your car correctly
  • For example, if you insure your car for €8,000 and its current market value is €10,000, you will only get 80% of the cost of the repairs or to replace the car if you have a claim
Avoid driving convictions and penalty points
  • Dangerous driving or drink driving can result in a higher premium or even insurance cover being refused
  • The number of penalty points you have can also increase your premium
Change where you park your car
  • You may be able to save money if you let your insurer know that you park your car in a locked garage. Insurers often prefer this to the car being parked on the street or in your driveway.
  • Some areas will have higher claim rates and you will pay more if you live in a city than in a rural area.
Think about adding named drivers to your policy
  • Adding a named driver can increase your premium because of their age, for example if you add a younger family member.
  • In other cases, it can reduce your premium, for example if the named driver has a good driving and claims history etc
Build up your no claims discount
  • You can lower your premium if you haven’t made a claim or a claim hasn’t been made against you
Park your car in a secure place
  • Parking your car in a more secure place can reduce your premium. For example, in your garage or in your driveway instead of on the road
Pay a higher excess
  • Some insurance companies give you the option of a cheaper premium if you opt for a higher excess
Choose your car wisely
  • Usually the bigger your car, the bigger the engine and the higher the cost of insurance
  • Left-hand drive, convertible and modified cars are usually more expensive to insure
  • Always check with an insurance company or broker to see what the premium would be before buying a car or if you are changing cars during the policy
Decide if you need to use your car for work – if so, you need different cover
  • It costs more to insure a car or van for commercial use than for personal use. You will usually have to pay commercial premium rates if you drive a van, even if it is only for domestic use.
  • Check with your insurance company about the definition of ‘use for work’ in your policy and ask about cover for work-related items in your car
Try to get insurance in your own name
  • Some insurance companies will not consider your previous driving experience or your existing no claims discount if you haven’t had insurance in your own name or have not been named on an insurance policy within the last one/two years
Young drivers
  • Insurers are clamping down on parents insuring a vehicle and naming their children on them as it may be “cheaper”. Even though the parent is not the main user of the vehicle
  • This is called “fronting” and a consumer caught “fronting” could have their policy cancelled, a claim declined or have difficulty getting insurance in the future
  • Young drivers can be a named driver on a parent’s policy for one or two years and then apply for their full licence. This can save money in the long run as they can start to build up a No Claims Bonus in their own name.

What is a no claims bonus?

Your no claims bonus (also called your no claims discount) is a reduction in your insurance premium based on the number of years since you have made a claim, or a claim was made against you. Only the policyholder can earn a no claims bonus.

Usually, the maximum number of years that you can receive a no claims bonus for is five or six years. Your no claims bonus does not increase any further after six years as this is the maximum discount. Therefore, whether you have eight or 15 years of no claims, the discount that you receive will be the same. Note: some insurance companies will give you a discount for up to nine years of no claims. However, it must be stated on your no claims bonus that you are entitled to it and most insurers will only state five years.

Your bonus may be reduced or lost if you make a claim or a claim is made against you, even if you were not at fault. If the accident was not your fault and the insurance company can recover their cost, your bonus may be restored.

Top Tip
  • Your no claims bonus can be transferred from one insurance company to another, and from one car to another. However, if you have two cars, you will need to work up a no claims bonus for each car. Each no claims bonus is specific to one vehicle at a time. This means that if you buy a second car, you would not automatically get any benefit from your existing no claims bonus. However, some insurance companies may give you an introductory discount if you have a good claims record on your main vehicle.
  • A full no claims bonus can have a significant impact on the amount you pay for your insurance.

Some insurance companies will allow you to pay to protect all or part of your no claims bonus. The following are some of the options you can choose:

  • Full no claims bonus protection
  • Step back bonus protection
  • No claims discount protection for fire and theft claims

Full no claims bonus protection

This means that if a claim is made against your policy, you will not lose any of the years of no claims bonus which you have built up. Always read the small print of your policy documents for any exclusions or limitations to your no claims bonus protection. Many insurance companies may only protect your no claims bonus for a fire and theft claim or for a certain number of claims within a particular time period. No claims bonus protection does not make you immune to a claim, you still must disclose the claim and it may carry a loading. No claims bonus protection ensures you keep your discount if you have a claim. This means that your premium will not be impacted as much if there is a claim.

Step back bonus protection

Step back bonus protection means you will not lose all of your no claims bonus if you have to make a claim, or if a claim is made against you. The amount of your no claims bonus that you lose depends on your policy, for example, a ‘step back’ rate of 30% means you lose three years of your no claims bonus.

No claims bonus protection for fire and theft claims

This means you would still keep your no claims discount if you have a claim for fire or theft only.

Will you lose your no claims bonus if you stop driving for a while?

If you have no insurance in your own name for two years or more, many insurance companies will not give you your no claims discount when you apply for cover again.

Information insurance companies should give you when buying insurance

Insurance companies must:

  • Tell you how long their quote is valid for and make sure you are aware of any special conditions or restrictions that apply to the cover they are offering you
  • Tell you about any discounts that apply or any extra premium being charged when they give you a quote
  • Tell you that your cover or any claim you make could be affected if you give incorrect or incomplete information when applying for cover
  • Tell you that you have a cooling off period of 14 days after you have agreed to buy the insurance policy – this only applies to distance contracts, that is if you bought your insurance policy online or over the phone
  • Issue your policy document within five business days of providing you with cover

Refused car insurance?

An insurance company can refuse to sell you car insurance as long as they are not in breach of equality law. However, the refusal must be in writing and given to you within five business days of refusing you.

You can contact the Declined Cases Committee of Insurance Ireland if you have been refused cover by three or more insurance companies. Insurance Ireland is the representative body for insurance companies in Ireland. They will get an insurance quote for you (usually from the first company you approached) unless there are public policy reasons why you should not be given car insurance. It is important that you keep note of the order in which you received your quotes.

You can also contact the Declined Cases Committee if you feel a quote is too high or the conditions attached are so severe that it amounts to a refusal to insure you.

Is my car insured if I take it abroad?

In general if you buy a car insurance policy from an EU-based insurance company you will have third party insurance to drive your car in any EU country.  You can usually take your car for up to 31 days to another EU member state for no extra charge.  However, you may want to arrange additional cover for your trip. You should also check with your insurance company if you want to travel outside the EU.

Top Tip
You should always tell your insurance company if you plan to take your car abroad and to check with them what exactly is covered on your policy.
What to do if you have an accident
What to do if you think the accident was not your fault
What to do if you think the accident was your fault
If you are injured
What to do if the other driver was uninsured or can’t be identified
Repairs to your car following a claim
What an insurance company has to do during the claims process
What if your insurance company goes out of business

What to do if you have a car accident

  • Don’t say it was your fault
  • Get the names, addresses, telephone numbers, car insurance details of all the other people involved in the accident
  • Make a note of the registration number and the make and model of the other car(s) involved in the accident
  • Take the names, addresses and phone numbers of any witnesses
  • Where possible take a video or photos before the vehicles are moved
  • Contact the Gardaí immediately and if they write a report get a copy
  • Contact your insurance company as soon as possible giving them as much detail as you can
  • Even if you do not think you will claim through your insurance and instead settle the matter directly, it is important to notify your insurer. This is to protect you if costs start running high or in the event of an injury arising later.
Top Tip
  • Check the excess on your policy – you will not be able to claim less than the excess amount.
  • When filling in a claim form give as much information and supporting evidence as possible, for example photos, videos, Gardaí reports etc.

If you think the accident was not your fault

If you think the accident was not your fault, depending on your policy type, you may have two options:

  1. You can make a claim directly from the other person’s insurance company or
  2. If you have comprehensive car insurance you can claim on your own policy.

If you choose the second option your insurance company will recover its costs from the other person’s insurance company.  The accident will count as a claim on your policy until your insurance company recovers their costs. This means your no claims bonus could be temporarily affected and you may have to pay the excess on your policy. However, the excess should be refunded once your insurance company recovers their costs.

If you think the accident was your fault

If the accident was your fault you should tell your insurance company as soon as possible.  If your insurance company is satisfied that the accident was your fault they will arrange to deal with any relevant costs the third party has claimed for. In addition, if you have a comprehensive policy, they will arrange for the costs of repairing your own car. If you have third party, fire and theft cover then your insurance company will only cover the costs of the other person’s claim.

If you are injured

With personal injury claims, you don’t have to accept the amount an insurance company offers. You can decide to reject their offer and refer your claim to the Personal Injuries Assessment Board (PIAB). PIAB will decide the amount of compensation you should get for your personal injuries. You can submit the claim yourself and you do not need to use a solicitor.  More information on making a claim can be found on the PIAB website.

If the other driver was not insured or can’t be identified

If the car accident was caused by an uninsured or unidentified driver you may be able to claim from the Motor Insurers’ Bureau of Ireland. More information can be found on the MIBI website.

Repairs to your car following a claim

Some insurance companies may ask that you use one of their approved garages to repair your car or ask you to provide estimates before you can get the car repaired.

If your insurance company decides that it is not feasible or economical to repair the car they generally offer you the car’s current market value and take the car from you. This is known as an insurance write off. There are different categories of insurance write offs. More information can be found on the Road Safety Authority’s website.

Top Tip
After a successful claim, insurance companies can deduct VAT from your total settlement amount in a number of situations:

  • If you are self-employed/VAT registered – as you can claim it back.
  • If the insurance company is paying the garage directly, they may deduct VAT as it is a business to business transaction.

Examples of when VAT should not be deducted from your total settlement amount:

  • If you are paying for the repairs yourself and being refunded by the insurance company.
  • If you are a private individual, receiving the payment from an insurance company.

What an insurance company must do when you make a claim:

  • If a claim form has to be filled in, the insurance company must send you one within five business days of being informed of the claim
  • Offer to help you with the claim
  • Tell you that you can use a loss assessor to deal with your claim but that you will have to pay for this service yourself
  • Make sure that any offer made following the claims process is fair to the policyholder
  • Tell you within 10 business days of them making a decision on the claim
  • Allow you 10 business days to accept or reject the offer
  • Pay out on the claim within 10 business days of you accepting the offer
  • If your claim is refused, they must tell you the reasons why in writing

More information on what insurance companies have to do during the claims process can be found in the Central Bank of Ireland’s Consumer Protection Code 2012.

What if your insurance company goes out of business?

A liquidator will usually be appointed to the insurance company and they will establish if the insurance company has enough money to:

  1. refund customers’ premiums and
  2. pay out on outstanding claims.

If the insurance company is not in a position to refund you the premium you paid, you will be out of pocket. If you pay by direct debit you should contact your bank and cancel the direct debit immediately.  Either way, if you want to continue to drive your car you must buy a new insurance policy.

If the insurance company is not in a position to pay out on claims, the liquidator can make an application to the High Court to approve payments out of the Insurance Compensation Fund. The total amount the Fund can pay out for a claim is 65% of the amount due to the person making the claim. If you have commercial insurance you cannot claim under the Fund.

If your insurance company goes out of business you should contact the liquidator directly for more information.

How much notice does your insurance company need to give you?
Switching to a new insurance company
What do you need to do to switch insurance companies?

How much notice does your insurance company need to give you?

Drivers generally renew their car insurance every year. By law your insurance company must send your insurance renewal notice, including your no claims bonus certificate, at least 15 business days before your current policy ends. You will need your no claims bonus certificate if you want to move to a different insurance company.

Top Tip
  • If you pay by direct debit, your current insurance company will usually renew your policy for another year if you don’t cancel your current policy with them before it ends.
  • Policies and quotes can vary significantly between insurance companies so it’s important to shop around – you can use our car insurance shopping around checklist.
  • You can also look at our tips on cutting your insurance costs.

Switching to a new insurance company

The ideal time to switch insurance companies is when you are renewing your annual insurance policy after you have shopped around. After getting a number of quotes, don’t be afraid to bargain with insurance companies, including your current provider, to try and get the best price possible.

If you change your mind after switching, your insurance company must give you a 14 day cooling off period. During that time you can cancel the policy and get a full refund, less administration charges (where relevant). Administration charges should be set out in the insurance company’s terms of business which should be given to you before they sell you a policy.

It is also possible to switch insurance companies during your policy. However, your insurance company will usually charge you a penalty fee. You need to check the terms and conditions of your policy to find out the cost of switching and based on this, decide if it is worth switching during the policy.

Top Tip
If your insurance company cancels your car insurance policy, for whatever reason, they must give you seven days’ notice.

What do you need to do to switch insurance company?

  • Notify your insurance company in writing that you are cancelling your policy if your policy is still in place
  • If you are paying by direct debit, contact your insurance company in writing to cancel the direct debit and send a copy of the letter to your bank. You may also be able to cancel a direct debit through online banking
  • Get a copy of your no claims discount from your previous insurance company and send it to your new company
  • Send your new insurance company a copy of your current driving license
  • Some insurance companies will require a copy of the Vehicle Licensing Certificate (VLC) to prove ownership and the NCT certificate to prove roadworthiness.

If you are not satisfied with your insurance company, you can make a complaint to them directly.  Following that if you are still not satisfied with their response you have the right to complain to the Financial Services and Pensions Ombudsman.  We have more information on how to make a complaint to a financial services company.

Tags: , ,

Haven’t found what you're looking for?