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, you can also 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 own vehicle. This type of cover costs more than basic third-party cover.

Comprehensive

This gives you third-party, fire and theft cover, and 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 person or their partner. There are restrictions with certain insurers based on the engine size 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. This allows anyone with a full driving license to drive your car with your permission.
• Driver personal accident cover. This 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.

Examples of when you might choose different car insurance policies

• What type and level of cover best suits your needs? Think about the type of cover you need for your current circumstances. You may want additional benefits such as breakdown assistance, courtesy car, and so on. If your car is old or low in value, think about whether comprehensive cover is worth the extra cost.
• Ask about any restrictions on the policy, for example, if only named drivers are covered.
• Ask what each policy covers, the exclusions and the amount of the excess.
• Think about whether you should protect your no claims bonus.

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

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

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 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 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 may give you a discount for more than 5 years no claims. However, it must be stated on your no claims bonus that you are entitled to it and most insurers will state five years only.

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.

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

If you find yourself in a position where you need to make a claim on your insurance, you can find a step by step guide here to help you.

Full no claims bonus protection

With full no claims bonus protection, 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 as it would be if there were a claim made.

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 that you lose depends on the terms and conditions of your policy.

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.

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 agree to buy the insurance policy
• issue your policy document within five business days of providing you with cover

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.

If you have been refused cover by three or more insurance companies, you can contact the Declined Cases Committee of Insurance Ireland. 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.

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 – this will be set out in your policy. 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.

What to do if you have a car accident:

• don’t say it was your fault
• get the names, addresses, telephone numbers and 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 of it
• 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 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

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 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.

You don’t have to accept the amount an insurance company offers for a personal injury claim. 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 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.

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.

• 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
• provide you with the contact details of the loss assessor appointed by the insurance company and notify you that the loss assessor will act in the interest of the insurer
• make sure that any offer made following the claims process is fair to the policyholder
• inform you within 10 business days of their 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 or another durable medium such as email or PDF

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.

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.

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 (NCB), at least 20 working days before your current policy ends. If your insurer does not wish to invite a renewal, it must also give you at least 20 working days’ notice. Your policy renewal document must include quotes for each type of policy they offer, for example third party; third party, fire and theft; and comprehensive policies. Some insurers do not offer third party only; in this case they don’t have to provide a quote for third party only. You will need your NCB if you want to move to a different insurance company.

At this stage, the terms of the policy including restrictions and limitations, should be provided, along with your NCB. In addition, if it is a renewal, any changes to the policy terms, including restrictions and limitations, should be provided.

On the same page that shows your renewal premium price, your insurer must state the following:

• the premiums paid for the policy in the previous five years
• a list of any claims, including third party claims paid by the insurer to the consumer or to a third party(ies), in the previous five years
• if there was a mid-term adjustment during the previous policy year, the insurer must then also include:
  • an annualised premium figure for the previous policy year (excluding fees or charges applied for that adjustment)
  • a statement that the annualised premium shown may not be what was actually paid in the previous policy year

If immediate cover is required, the detailed information set out above may be provided to you in writing immediately after the insurance cover has been provided.

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.

• 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 National Car Test (NCT) certificate to prove roadworthiness

If your insurance company cancels your car insurance policy, they must give you 7-14 days’ notice. The insurer also must:

• repay the full balance of premium for the unexpired term
• provide the reason for cancellation
• not impose any financial cost on the consumer where a contract is cancelled