Young Drivers and Car Insurance
As the market leader for young drivers in Ireland servicing over 32% of the market*, we at Liberty felt there was a good opportunity to provide answers to those learning, new on the road or building up experience. So we want to give you, the consumer, the opportunity to ask us, the insurance experts, anything.
Q. Would I be better off remaining a named driver on my parents’ policy or getting my own policy? Short-term vs long-term?
A: It all depends on how often you're driving your parents’ car. If you're only driving it the odd time, then you’d be better off as a named driver on their policy. But if you take out a policy in your own name, then you will start to earn your own No Claims Bonus – which will save you a lot after the first year.
You might also be interested to know that if you're a named driver on your parents’ policy, then some insurers (including Liberty) will give you a Named Driver Discount for the number of full years you were named on their policy without any claims. This will stand to you when you take out your own policy.
If you have your own car, things are different and the insurance should be taken out in your name. Insuring a vehicle that you own in your parents’ name is known as ‘fronting’ and could result in your policy not being valid.
Q. If I’m insured on my own car, can I drive another insured car?
A: There’s no simple answer to this as it will vary from insurer to insurer and your own personal details such as your age, occupation or your type of licence. Some insurers may offer this cover as an optional extra, so it's worth checking out where you stand with your current insurer.
Q. Is having car insurance a necessity?
A: Yes – it's a legal requirement under the Road Traffic Act 1961 to have insurance for “your liabilities arising from the use of a mechanically propelled vehicle in a public place”. The minimum level of cover required is Third Party Only, which covers you solely for your liability to others in connection with the vehicle. Third Party Only cover does not provide cover for fire, theft or damage to your vehicle. For example, if you have a collision with another car, the insurer will pay for the damage to the other car – but not to yours.
Q.I have been refused an insurance quote. Why is this?
A: When an insurer like Liberty is assessing an application for insurance, we look at both the profile of the car and the driver. All insurers have acceptance criteria which set out the types of risks they want to insure. Liberty will insure cars up to 20 years old, but some insurers set this limit as low as 10 years.
Q. What am I supposed to do if no one will even give me a quote? Or if the quotes I do receive are so high I can’t afford it? Am I just supposed to wait until I’m older?
A: This is frustrating, but there is something you can do about it. All motor insurers in Ireland are signed up to the Declined Cases Agreement. This means that if you have approached at least three insurers and have not been able to get a quote, then you can apply to the Declined Cases Committee of Insurance Ireland.
Normally, the first insurer you approached will be required to give you a quote under the agreement. If you have been insured before, however, the last insurer you were with will be required to give you a quote. For more details and assistance, you can contact Insurance Ireland on:
Tel: 01 676 1914
Email: declined@insuranceireland.eu
It’s also worth considering that if you’ve received a quote but it’s higher than you can afford, you can look at ways to reduce your costs, including:
- Buying a lower powered car and avoiding any car modifications.
- Passing your driving test.
- Taking a lower level of cover, e.g., reducing cover from Comprehensive to Third Party Fire & Theft or removing optional covers such as Open Driving or Protected No Claims Bonus.
You can also look at splitting the costs over the year through the direct debit option. This allows you to avoid having to shell out all at once for your Car insurance cover.
Q. As a younger and less experienced driver, I understand that my premium will be higher, but being quoted €4k? Is that not simply over the top?
A: That’s an awful lot of money for a young driver to afford and we understand the difficulty this can cause.
At Liberty, we're working closely with Insurance Ireland to affect positive change. Unfortunately, we can’t comment on your individual price as there are many different factors that could be affecting your price. Some examples of this are the age of the car, horse power of the car, the make and model, modification to the car, years driving experience, years licence held, type of licence, additional drivers on the car, convictions, claims, penalty points held and, the cover selected, e.g., Comprehensive or Third Party Fire & Theft. Another factor is any optional cover such as Open Drive, Windscreen Cover, etc.
If you’ve received a quote but it’s higher than you can afford, you can look at ways to reduce your costs, as outlined in my previous answer.
Q. I’ve passed my test and now my premium has gone up, is this normal?
A: That sounds unfair, but in most cases, it wouldn’t go up. An individual insurer, however, could take the view that once you pass your test, you will be driving unaccompanied so you could be an increased risk as you would be driving alone for the first time.
Q. Why do insurance companies automatically assume young drivers are bad drivers?
A: I know that it sometimes feels like that, but Liberty definitely does not assume young drivers are bad drivers – and our prices are proof of this. As a general rule, insurers set their prices based on the claims experience of similar policies.
Because young drivers have less experience on the roads, they have an overall worse claim experience than older drivers. There’s some good news, however. When we set our prices, we take into account many factors other than just age. We reward you for the number of years you have held your licence – and also the number of years you have been driving. Your premium will also be reduced based on any claim-free years as a named driver or as a policyholder.
Our aim is to be as open and transparent as possible. This Q&A was set up with young drivers in mind, to provide advice and tips on getting the best on insurance quotes.
Check back in next week for the second in the series in our Young Drivers FAQs.
Get in Touch with Your Questions
If you’re a young driver and have a question, the quickest way to get in touch with us is on social media through our Twitter account where you’ll find us Mon-Fri 9am-5pm.
Young Drivers Car Insurance with Liberty
Looking for your first insurance policy? Get a car insurance quote online with Liberty Insurance today.
*Accurate as of August 25th, 2016.