Learner or first time owner? Car insurance explained.

insurance

You’ve got the theory test, the learner permit, the lessons, picked out your first car – now it’s time to get your own car insurance policy. While the process can feel like a mystery or a learning curve, it doesn’t have to be. Here’s our guide to what you need and what the options mean.

Why do I need car insurance?

In short: it’s the law. To drive a car in Ireland, you must have insurance. Driving without insurance is a criminal offence, and could lead to 5 penalty points and a fine of up €5,000. It could leave to disqualification or even a 6 month prison sentence.

As well as being required by law, having car insurance means that if you are involved in a road incident, you won’t find yourself having to pay for all the damage to another driver’s vehicle yourself. Depending on the policy, you might also be covered for damage to your own car, and/or your car being stolen or set on fire.

Generally, when there is an incident, the insurer of whoever is at fault covers the other driver’s car. You can find out more about making a claim after an incident here.

When do I need my own insurance policy? What about driving other people’s cars?

If you’re driving someone else’s car, you’ll need to be a “named driver” on their policy. So if you’re learning, and using a parent’s or partner’s car to practise with your sponsor, you’ll need to make sure you are covered on their policy.

If you are the owner and main driver of the car, you’ll need to take out your own policy. The price of insurance can vary based on the type of car, so it’s a good idea to get a few insurance quotes before buying your first car to make sure you’re not in for any nasty surprises after the sale goes through. Don’t be tempted to put someone else as the main driver and yourself as a named driver in attempt to get a cheaper premium. That’s an offence known as “fronting” and could see your policy being voided or even a charge of insurance fraud.

Some insurance policies include “open driving”, which means anyone with a full licence can drive your vehicle as well as you, and/or a “driving other cars” option, meaning you can drive other people’s cars occasionally, with their permission. That said, both of these usually come with conditions, such as an age restriction, a requirement to have a clean licence, a limit to third party cover, or a restriction on the type of vehicles that are covered. So before you drive anyone else’s vehicle, you should always check the policy documents – yours and theirs – carefully to make sure that you are covered.

What types of car insurance are out there?

There are three main types of car insurance policy.

Third party insurance

only covers damage to another driver’s property, and won’t cover damage to your vehicle if you’re at fault in an incident.

Third party, fire and theft insurance

covers damage to another driver’s property, but will also cover damage to your vehicle if it’s stolen or goes on fire.

Fully comprehensive insurance

gives the same cover as Third Party, Fire and Theft, and also covers damage to your own vehicle in the event of an incident.

You can find out more about these types of insurance here.

What options can be included in a policy? What do other insurance terms mean?

When you’re taking out an insurance policy, you’ll see lots of different terms and there might be lots of different options on offer.

Premium:

The premium is the price you pay for cover. It’s calculated based on your risk, taking into account your driving experience, the type of vehicle, where the vehicle is stored, and so on.

Quote:

A quote is an estimated premium for the type of coverage you have asked for. You can get a quote before actually buying a policy, but they usually have a validity period. (Click here to get an AA Car Insurance quote online)

Claim:

An insurance claim provides you with financial protection in the event of loss or damage.

No claims discount/ no claims bonus:

A no claims bonus is a discount you get based on the number of years you have been driving without needing to make a claim. No claims bonus protection can be offered as an optional extra on a policy, which means you may keep your built-up discount even if you make certain types of claims. There are two different types: step-back and full protection.

Excess:

An excess amount is the amount you pay before an insurer pays the rest. So if your policy came with an excess of €150, you will pay the first €150 of damages on any claim, and then the insurer covers the rest.

Named driver:

A named driver is a driver who is not the main policy holder, but is named on the policy as an additional driver. This is often the first way a learner is insured, as a named driver on a family member’s policy. A word of warning though: if you are the vehicle’s main driver, you must be the policy holder for that vehicle. It is illegal to use someone else as the policy holder and have yourself as a named driver if you are the vehicle’s owner and main driver.

Named driver experience:

If you are taking out your first policy as a main driver, and you have been a named driver on someone else’s policy before, it’s important to mention this, and how many years you have been named. You may avail of a cheaper premium, as you have earned named driving experience. Your insurer will require proof: this is called a letter of named driving experience, which must be requested from the insurer of the policy you were named on.

Open driving:

Open driving is usually an optional extra on some policies, which means any other qualified driver can drive your car (as long as you give them permission). There is usually an age condition, or a requirement to have a full clean licence, attached to this. This means a family member or friend can drive your car for you without needing to be added as a named driver.

Driving other cars:

If your policy has a “driving other cars” option, you would be covered to drive another person’s car, even if you’re not a named driver. There are usually conditions attached to this (it may not cover a car owned by your partner, employer or someone you live with, certain types of vehicles may not be included, and you’ll likely be restricted to third party cover only). This shouldn’t be used for a vehicle you regularly drive – it’s for one-offs and emergencies.

Broker or intermediary:

A broker or intermediary, like AA Ireland, sells insurance policies from a number of different insurers. They select the best quotes from a panel of insurers for their customers.

What do I need to have to hand when looking for a first car insurance quote?

When you’re getting your first car insurance quotes, the insurer or broker will need to record certain details about you and your vehicle. So when you make the call or go online to get a quote, you can make things easier by having the following info ready before you start:

  • Licence details and personal details for both yourself and anyone you’re planning to add as a named driver. For licences, you will need to know about licence type, the period of validity and how long you/they have had it, where it was issued and any penalty points. You will also need provide details on occupation, as well as medical conditions, convictions or claims.
  • Your vehicle details – make, model, reg plate, mileage, any modifications etc
  • Details of any named driver experience you have on anyone else’s policy
  • An idea of what type of cover you’re looking for and any optional extras you’re considering (but not to worry if you don’t know – the agent will be able to explain all of the options to you before you make a decision.)
This article is part of an advice series for learner and new drivers. You can see the rest here. You may also be interested in our top choices for a first car under €5000, and our tips for reducing your insurance premium.
In the market for a car insurance quote? You can get a great deal on AA Car Insurance online here.