Wednesday 21 November 2018

Refunds for drivers who pass their tests

Your questions answered

'The general public usually knows maybe four or five of the traditional insurance brands and they often just approach these and then take their response as gospel, as it were' Stock image
'The general public usually knows maybe four or five of the traditional insurance brands and they often just approach these and then take their response as gospel, as it were' Stock image

Jonathan Hehir

Q I read recently that young drivers will see a big decrease in premiums when they get their full licence. We are shopping around for a second-hand car for my son and he will take out his own policy on this. But his test is coming up in September. We are hoping he will pass and if this happens I'm wondering if there is any way of getting some money back from the insurer for his cover on our policy?

Finian, Co Galway.

The short answer is yes, your son should have recourse to a refund if he gets his full licence. But your question is very timely, as it's important to do your homework before you take out the policy. You should always ask, prior to signing any policy documents, what the insurer's refund process is in a case such as yours.

An insurer today should be able to give you a pro-rata amount for what your son will receive back upon passing his full licence driving test.

Just to note also, some insurers often have a target market that they want to sell to, so if you fall outside this remit then the terms they offer can be unfavourable. So, you need to know which insurers want young drivers as customers - not all of them do.

Another important consideration is what type of car you buy your son.

Obviously, price is a big factor, but you should also think about the impact the vehicle type and age will have on the insurance. Look at the model and engine size of the car you are going to buy. Don't be afraid to ask for different quotes for various cars.

Do I need landlord cover?

Q I have my own home but I also own a rental property that my daughter lives in, rent-free. My insurer now says I need a landlord insurance policy, which is more expensive, and to even get this I need a tenancy agreement in place. My intention is that my daughter will live there for the foreseeable future, as rents and house prices are way too costly for her to afford for the next few years. But the insurers' demands seem a bit unnecessary and costly. What can I do?

Sinead, Co Wicklow

We see a lot of this with mainstream insurers. Most will now insist that a lease is in place, but you do not have to pander to these demands. You just need to get the right advice from an expert who can point you in the right direction because there are insurers out there that will recognise your situation for what it is.

The general public usually knows maybe four or five of the traditional insurance brands and they often just approach these and then take their response as gospel, as it were. But the insurance market is much bigger than people realise, and brokers will have access to other insurers and products that are not readily available to consumers.

In your case, you will be able to get a policy that insures this property as a primary residence with the same terms and conditions as a regular main residence home insurance policy.

One point to note however, you don't say how big the property is, but if your daughter's group of friends were to also move into the property at a later date, then you would have to revisit your home insurance policy type as these extra lodgers would change the nature of the occupancy.

Month of missed insurance

Q Two years ago, I accidentally missed a month on my car insurance. I was out of the country for an extended period for work and I didn't see my renewal notice come through and by the time I got back to Ireland my insurance had lapsed for about five weeks. Nobody was driving my car during this time. However, my insurance company refused to give me another policy as a result. Since then I have really struggled to get insurance because I keep having to declare this refusal. Will this carry on indefinitely?

John, Co Dublin.

Yes, this is a common question on all insurance application forms. Nine times out of 10, insurance companies will ask "have you ever been declined insurance?" rather than "have you been declined insurance in last five years?"

My first word of advice would be that people should never be tempted to lie, or even not disclose the whole truth on an insurance form. Any untruths - no matter how small or insignificant they might seem - could come back to bite you in the event of a claim, and insurance companies have become increasingly stringent in their approach to claims.

With reference to your particular situation, to ensure due consideration is given by an insurer to the circumstances that led to this issue, you need to "set out your stall" clearly, as it were. What I mean by this is to put your explanation, which seems very reasonable, down in a clear and cogent manner.

If you engage the expertise of a broker, they will help you with this and they can also deal with the insurer on your behalf to negotiate the best deal for you.

It may well be the case that you will always face having to answer this question, but if you put it down in black and white now, you can draw on it whenever you need it.

Multi-vehicle insurance

Q I have a carpentry business and have two vehicles for this - both of these have full NCB policies. I'm looking to get a third vehicle, but because I have no NCB for the third van, insurance companies won't quote me or are quoting stupidly high premiums. I'm just wondering if there is any way around this?

Eoin, Co Carlow

Sometimes, if you don't fit in the narrow boxes that insurers have set out, they can make it difficult for you to get a policy. This is where you find yourself now. But you have two options in this case.

The first of which is, rather that trying to insure all three vehicles separately, you could take out what's called a "mini-fleet" policy.

You may not have heard of this because there is a market myth doing the rounds that you need to have five vehicles to qualify for these policies. This isn't the case. This may well suit you and your business needs.

Also, if your business is growing, you may want to buy additional vehicles down the line which can be added to the policy.

The second option is to go ahead with the single insurance for each vehicle.

In that case, you'll need to go to an insurer that will offer what is termed a "mirror NCB", which basically recognises driver experience on other vehicles.

Jonathan Hehir is CEO of online insurance broker Coverinaclick.ie

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