History of motor insurance in Ireland
Welcome to the History of motor insurance in Ireland. Drivers in Ireland are legally required to have a car insurance policy before operating a vehicle on a public road. The mandatory requirement for individuals to hold motor insurance transitioned from horse-drawn carriages to motorised vehicles.
The Locomotive Act was introduced in 1865, outlining the laws relating to mechanically propelled vehicles. The world’s first mass-manufactured vehicle was the Model T, produced in 1908. In the late 1920s, over six thousand individuals were killed annually on roads in the UK due to car accidents. Consequently, the government introduced the following Acts to ensure the adaptation of car insurance. These included:
Road Traffic Act 1930 (UK), 3rd party insurance was made compulsory.
Road Traffic Act 1933 (Ireland), legal liability for injury or death to 3rd parties in public places was made compulsory.
The Road Traffic Act 1961 is the principal legislation in Ireland applicable to motor vehicles. The minimum insurance required is unlimited indemnity concerning death or injury to 3rd parties and 1 million Euros for damage or loss to 3rd party property. The 5th EU Directive introduced the Act.
The Road Traffic Act 1961 was updated and amended by the Road Traffic Acts of 2002 and 2004. Section 56 of the Road Traffic Act made it mandatory for individuals to take out insurance before driving a mechanically propelled vehicle in public places. The objective was to ensure that car accident victims would be compensated if the driver were negligent.
Exemptions of the Road Traffic Act are outlined in Section 60:
- Vehicles driven by a state-sponsored body.
- A board established by the Act of the Oireachtas.
- A company where most of the shares are owned by a state-sponsored body or a board set up by the Act of the Oireachtas.
For a car insurance policy to be approved, it must meet the following requirements set out by the Road Traffic Act:
- The policy must insure all designated territories.
- It must be issued to the named driver.
- It must cover unlimited liability and up to 1 million Euro for loss or damage to 3rd party property.
A motor insurance policy is not required to cover liability for the following:
- Front seat passengers in goods vehicles as of 1995.
- Front seat passengers other than in privately owned cars.
- Sidecar or pillion passengers on motorbikes as per 1998.
- Damage in or on the vehicle.
- Damage to property in the control of the insured driver.
Irish Road Traffic Acts to note:
The Road Traffic Act of 1968 was responsible for establishing the Medical Bureau of Road Safety. This Bureau was set up to analyse urine and blood samples of drivers believed to be under the influence of alcohol.
The Road Traffic Act 2002 was the Act which introduced the penalty point system in Ireland. The penalty point system was established to improve driver behaviour and reduce road accidents and deaths. Penalty points are now one of the factors that insurance providers take into consideration before quoting a premium.
The Road Traffic Act 2010 introduced four new drink-driving offences, which included reduced alcohol limits for drivers and compulsory breath testing.
The Road Traffic Act 2011 requires the Gardai to conduct a breath test if they think a driver has consumed alcohol when an individual is injured at the scene of a car accident.
Car insurance proposal form
This section will briefly review the car insurance proposal form. Drivers must complete a proposal form before the insurance company will offer a quote. Details on these forms may include:
- Driver details: such as name, address, DOB, occupation etc
- Driving history: years of driving experience, previous claims, driving convictions etc
- Vehicle details; registration number, make and model of car, number of passenger seats, date of purchase, the value of the vehicle, type of fuel etc
- Other questions will relate to usage, such as what the driver will be using the car for, i.e. work, leisure, commercial etc
- The customer must select the type of insurance required, third party only; third party fire and theft or comprehensive cover.
- Finally, the customer must complete a declaration to confirm that all details provided are correct.
Insurance policy summary
The minimum cover required by the Road Traffic Act (RTA) is unlimited liability for injury or death and up to 1 million Euros for 3rd party property damage. The main types of motor insurance policies are:
3rd party liability only, this is the minimum amount of cover required by the RTA with increased property damage of up to 30 million euros.
3rd party fire & theft, this policy covers third-party liability as explained above in addition to fire, lighting & explosion damage and theft of the vehicle.
Fully comprehensive, this policy covers 3rd party fire & theft plus accidental damage, personal accident and loss of personal items.
Important information to note:
- The insurer generally pays for damage or loss of the vehicle through repair, replacement or cash.
- ‘Right of vehicle recovery’ – this is the right the insurance company reserves to recover the amount from the insured if the insurance company has to pay a claim because of the RTA, which would not typically be covered by the policy.
- Driving other vehicles – this cover permits the policyholder to drive cars owned by other individuals. However, this cover will be restricted to third-party cover only.
Motor insurance policy documents
A summary of the typical information you would expect to find in your motor insurance documentation.
- A car insurance booklet, this will contain terms and conditions relating to the level of cover.
- The policy booklet, this will contain a glossary of terms and insurance-related definitions. It will also outline the criteria for excess limits, territories, market value, certificate of insurance etc.
- The general conditions section should contain information regarding what the policy covers and what to do if there is a change to your personal information, such as a change of address, employment, car or other important information.
- There will also be a section for exclusions; this sets out a list of items that are not covered. These exemptions may include; if the vehicle is being used for activities not shown on the certificate, if you are driving despite being disqualified, if the car is used to tow a caravan or trailer without adequate cover etc.
- The conditions for loss or damage section will outline the conditions for loss or damage, what the insurer will pay for and what is involved if there is a loss or damage to the vehicle.
- Finally, the policy will outline the limited liability conditions to third parties. This will relate to your cover, driving your car, cover for driving other vehicles, etc.
Car insurance rating in Ireland
Annual car insurance premiums in Ireland are based on the following criteria, age and experience of the driver, type and usage of vehicle, value, annual mileage, claims history, category of cover etc.
Gender is no longer a rating factor from December 2012 due to a European Court of Justice ruling. However, men may still face more expensive premiums due to certain male-dominated professions and those driving high-performance cars.
Thank you for visiting our History of Motor Insurance in Ireland article. We hope you found it informative.