Car insurance is a necessary evil – no motorist wants to pay for it but each one has to have it, at minimum to abide by the law but, more importantly, to cover themselves in the event of an accident.
The concept sounds fair and sensible; each motorist agrees to pay a premium and the insurance company agrees to pay your losses, as defined in your policy. However, motorists are constantly aware that this is not the case, or at least the playing field is not as level as this. Far too often, people pick up the phone seeking insurance only to be told that their premium is going to be extortionately high or in the worst-case scenario, they are told they’re not insurable. So, what category are these people in and why exactly is this happening?
Across the board
Before focusing on specific categories of motorist, it must be noted that premiums across the board have climbed significantly in the last three years. This is because insurers were losing money for various reasons including fraud, exaggerated claims, absurdly high legal costs and a culture of making ‘‘compo’’ claims. Ireland also has very generous awards for personal injuries compared with other countries.
Insurance companies were also at fault because some foolishly got involved in an unsustainable price war for a number of years and then they had to push up prices to strengthen their reserves.
As a result, price changes affected the whole market, but there are still certain categories of motorists that are finding it particularly difficult to find affordable insurance.
Younger drivers
Insurers generally class younger drivers as motorists under the age of 24. It is worth noting that there is no longer any distinction between male and female drivers – this was made illegal under EU law in December 2012.
Prior to this, premiums for younger males were significantly higher than females.
There are two reasons why premiums for younger drivers are higher. Firstly, younger drivers tend to be more likely to crash than experienced drivers – research shows that one in five newly qualified drivers have crashed within the first six months of passing their test while other evidence suggests that a driver is considered to be inexperienced until he or she has driven 100,000km.
Secondly, while the price hike over the last number of years affected everybody, it had more of an effect on younger drivers as their premiums were higher in the first place.
Tips
Learning to drive: when learning to drive, select a high-quality driving school (some may even be affiliated to an insurer) and then consider doing post-test lessons, which will make you a safer driver and may count when it comes to getting a motor quote.Stay claims-free and points-free: learning to drive is expensive and is front-loaded. The first year’s premium is going to be high but, for many, it can come down gradually if you have and maintain a clean record.Consider being a named driver: getting started as a named driver on a parent’s car is a good idea. Insurers will give you some credit for that. Aim to build up a one- to three-year record as a named driver before buying your own car.Buy smart: when you decide to buy your own car, be sensible. Older, more powerful vehicles with large engines are expensive to insure, tax and run. Instead, buy a practical car which is newer and economical.Older drivers
Although there isn’t a specific definition, motorists over 70 years of age tend to be classified as older drivers. People in that age category can only get a three-year driving licence and must be medically assessed for each renewal.
Why are premiums more expensive and harder to get for older drivers? The answer is exactly the same as for younger drivers. It is not that older drivers are getting more expensive in isolation, the whole market has gone up in price which tends to have a proportionally higher effect on those who are higher than normal risk.
Tips
Highlight the positives: talk to your insurer about your specific details. Many older drivers have quite low mileage and insurers may factor that in. Ensure that you are medically fit to drive: if you have a medical condition that affects your ability to drive you must advise the National Driver Licence Service (NDLS) immediately, but once the NDLS deems you medically fit to drive, your insurer will cover you.Be honest: it is important that you never lie to or mislead your insurance company. While it might sound like a quick fix to lie about some details, your insurer may end up not paying your claim.Older vehicles
The definition for an older vehicle is something that will vary from one insurer to the next, but broadly speaking it is 13 to 14 years old or older.
Again, the reason for increasing premiums is more to do with the overall market being stressed. As well as this, insurance companies are all about risk profiling whereby they will look at a host of details about a driver to make assumptions about risk. In an insurer’s eyes, older cars are one factor that present a higher risk compared with newer vehicles. Newer vehicles are mechanically safer and have more advanced safety features that improve safety for passengers and third parties, which will in turn reduce the severity and potential for large third-party claims.
In addition, older cars are cheaper to buy and are sometimes purchased with the direct intent for use in staged, fraudulent accidents.
Tips
Shop around if seeking a new quote: there is no reason why you should not be able to get insured in an older car if you shop around and get as many quotes as possible. If you are struggling talk to an insurance broker.Switching insurer can sometimes be difficult: many insurers will continue to cover your vehicle as it gets older if they have done so for the preceding years. However, switching to a new insurer with an older vehicle is going to be more difficult, but it’s worth shopping around.Penalty points and no claims
bonuses
Penalty points and the loss of your no claims bonus will undoubtedly have a negative effect on your premium. If a driver has penalty points or has lost their no claims bonus, it is fair for an insurer to assume that he or she is at a higher risk of making a claim.
It is estimated that one penalty point incident could add about 12% to 15% to your insurance cost, but that can vary greatly because insurers look at multiple factors.
It is also estimated that the loss of your no claims bonus could increase your premium by as much as 50% to 80% and you will then have to claw this increase back in smaller percentages over a three- to five-year period.
Tips
Protect your no claims bonus: having ‘‘protected no claims discount’’ where a claim will not mean losing your bonus is an important part of your insurance and you should think very carefully before doing without it. Think quality: many people think only about being legal on the road and ‘‘having insurance’’. They tend not to think about the quality of that insurance which can be a mistake – be sure to get all the add-ons that you can. The cheapest quote may not necessarily be the most suitable for you. Read more
Special focus: motors
Car insurance is a necessary evil – no motorist wants to pay for it but each one has to have it, at minimum to abide by the law but, more importantly, to cover themselves in the event of an accident.
The concept sounds fair and sensible; each motorist agrees to pay a premium and the insurance company agrees to pay your losses, as defined in your policy. However, motorists are constantly aware that this is not the case, or at least the playing field is not as level as this. Far too often, people pick up the phone seeking insurance only to be told that their premium is going to be extortionately high or in the worst-case scenario, they are told they’re not insurable. So, what category are these people in and why exactly is this happening?
Across the board
Before focusing on specific categories of motorist, it must be noted that premiums across the board have climbed significantly in the last three years. This is because insurers were losing money for various reasons including fraud, exaggerated claims, absurdly high legal costs and a culture of making ‘‘compo’’ claims. Ireland also has very generous awards for personal injuries compared with other countries.
Insurance companies were also at fault because some foolishly got involved in an unsustainable price war for a number of years and then they had to push up prices to strengthen their reserves.
As a result, price changes affected the whole market, but there are still certain categories of motorists that are finding it particularly difficult to find affordable insurance.
Younger drivers
Insurers generally class younger drivers as motorists under the age of 24. It is worth noting that there is no longer any distinction between male and female drivers – this was made illegal under EU law in December 2012.
Prior to this, premiums for younger males were significantly higher than females.
There are two reasons why premiums for younger drivers are higher. Firstly, younger drivers tend to be more likely to crash than experienced drivers – research shows that one in five newly qualified drivers have crashed within the first six months of passing their test while other evidence suggests that a driver is considered to be inexperienced until he or she has driven 100,000km.
Secondly, while the price hike over the last number of years affected everybody, it had more of an effect on younger drivers as their premiums were higher in the first place.
Tips
Learning to drive: when learning to drive, select a high-quality driving school (some may even be affiliated to an insurer) and then consider doing post-test lessons, which will make you a safer driver and may count when it comes to getting a motor quote.Stay claims-free and points-free: learning to drive is expensive and is front-loaded. The first year’s premium is going to be high but, for many, it can come down gradually if you have and maintain a clean record.Consider being a named driver: getting started as a named driver on a parent’s car is a good idea. Insurers will give you some credit for that. Aim to build up a one- to three-year record as a named driver before buying your own car.Buy smart: when you decide to buy your own car, be sensible. Older, more powerful vehicles with large engines are expensive to insure, tax and run. Instead, buy a practical car which is newer and economical.Older drivers
Although there isn’t a specific definition, motorists over 70 years of age tend to be classified as older drivers. People in that age category can only get a three-year driving licence and must be medically assessed for each renewal.
Why are premiums more expensive and harder to get for older drivers? The answer is exactly the same as for younger drivers. It is not that older drivers are getting more expensive in isolation, the whole market has gone up in price which tends to have a proportionally higher effect on those who are higher than normal risk.
Tips
Highlight the positives: talk to your insurer about your specific details. Many older drivers have quite low mileage and insurers may factor that in. Ensure that you are medically fit to drive: if you have a medical condition that affects your ability to drive you must advise the National Driver Licence Service (NDLS) immediately, but once the NDLS deems you medically fit to drive, your insurer will cover you.Be honest: it is important that you never lie to or mislead your insurance company. While it might sound like a quick fix to lie about some details, your insurer may end up not paying your claim.Older vehicles
The definition for an older vehicle is something that will vary from one insurer to the next, but broadly speaking it is 13 to 14 years old or older.
Again, the reason for increasing premiums is more to do with the overall market being stressed. As well as this, insurance companies are all about risk profiling whereby they will look at a host of details about a driver to make assumptions about risk. In an insurer’s eyes, older cars are one factor that present a higher risk compared with newer vehicles. Newer vehicles are mechanically safer and have more advanced safety features that improve safety for passengers and third parties, which will in turn reduce the severity and potential for large third-party claims.
In addition, older cars are cheaper to buy and are sometimes purchased with the direct intent for use in staged, fraudulent accidents.
Tips
Shop around if seeking a new quote: there is no reason why you should not be able to get insured in an older car if you shop around and get as many quotes as possible. If you are struggling talk to an insurance broker.Switching insurer can sometimes be difficult: many insurers will continue to cover your vehicle as it gets older if they have done so for the preceding years. However, switching to a new insurer with an older vehicle is going to be more difficult, but it’s worth shopping around.Penalty points and no claims
bonuses
Penalty points and the loss of your no claims bonus will undoubtedly have a negative effect on your premium. If a driver has penalty points or has lost their no claims bonus, it is fair for an insurer to assume that he or she is at a higher risk of making a claim.
It is estimated that one penalty point incident could add about 12% to 15% to your insurance cost, but that can vary greatly because insurers look at multiple factors.
It is also estimated that the loss of your no claims bonus could increase your premium by as much as 50% to 80% and you will then have to claw this increase back in smaller percentages over a three- to five-year period.
Tips
Protect your no claims bonus: having ‘‘protected no claims discount’’ where a claim will not mean losing your bonus is an important part of your insurance and you should think very carefully before doing without it. Think quality: many people think only about being legal on the road and ‘‘having insurance’’. They tend not to think about the quality of that insurance which can be a mistake – be sure to get all the add-ons that you can. The cheapest quote may not necessarily be the most suitable for you. Read more
Special focus: motors
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