Now Ye're Talking - to an expert on young drivers’ insurance

Boards.ie: Niamh

This week we have a Liberty Insurance rep Michael Skelton in to answer questions on anything and everything to do with younger drivers. As the market leader for young drivers in Ireland servicing over 32% of the market, we felt it was a good opportunity to provide answers to those learning, new on the road or those building up experience. 

In his current role at Liberty Insurance as “Business Relationship Manager”, Michael manages the day to day relationships with Liberty’s personal lines broker partners. 

So please welcome Michael to the forum.  He will be answering queries between 9am-2pm Monday 15th – Wed 17th August so get your questions in now!

Sparkle16

Hi Michael, I'm just wondering would I be better off remaining a named driver on my parents or getting my own policy? Short term vs long term?

Liberty Insurance: Michael

Hi,

It all depends on how often you're driving your parents’ car. If you are 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 can save you a lot after the first year.

You might also be interested to know that if you are 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 then stand to you when you are taking 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.

cruizer101

Why is there a loading on older cars? The NCT verifies if a car is deemed in suitable safe driving condition so why should some who chooses to drive an older vehicle be penalized.
Yes I'm sure you can show statistics that show older cars may be involved in more accidents but remember correlation does not mean causation.
Also the point regarding older cars not having as much safety features is moot too, firstly my car a nicely specced 99 Honda Accord has more safety features than a new Dacia, secondly the majority of payout from insurance is on third party claims so it doesn't matter as much what I am driving as what the other is.
So I ask, Why the loading on older vehicles which many younger drivers are forced to drive based on cost?

AnCatDubh

Here's one thing that puzzled me recently and being in the industry perhaps you'll understand.

Why is it that some (many) insurers will give a discount for having a spouse named on a policy.

ie. Insurance premium without a spouse named = €600, and with a spouse named on the policy being €480

So if I am named, we get a lower premium but as I may never drive my spouses car surely the risk is no greater or lesser to the insurer than if I am not named - yet, being named potentially increases the risk as the insurance company are covering me driving my spouses car rather than relying on my own policy to cover me (albeit TP).

Is it a marketing thing (that they now have the identity of a potential new customer - though i'd guess a relatively expensive marketing measure if it was) or is it in some way a risk reduction measure which is genuinely lowering the risk associated with a policy holder and hence allowing for a genuine lowering of the premium.

Thanks so much if you can clarify that one.

Gloomtastic!

Why do insurance companies continue to provide cover for souped-up japanese imports (fart cans) driven by younger drivers? They pollute every town in Ireland with their loud exhaust systems and their disregard for speed limits means they are accidents waiting to happen.

Isn't it time to make driving apps compulsary for all younger drivers to recieve insurance cover?

Liberty Insurance: Michael

cruizer101 wrote: »

Why is there a loading on older cars? The NCT verifies if a car is deemed in suitable safe driving condition so why should some who chooses to drive an older vehicle be penalized.
Yes I'm sure you can show statistics that show older cars may be involved in more accidents but remember correlation does not mean causation.
Also the point regarding older cars not having as much safety features is moot too, firstly my car a nicely specced 99 Honda Accord has more safety features than a new Dacia, secondly the majority of payout from insurance is on third party claims so it doesn't matter as much what I am driving as what the other is.
So I ask, Why the loading on older vehicles which many younger drivers are forced to drive based on cost?

Hi,

When we’re providing a quote, we look at both the profile of the car and the driver. All insurers have terms and conditions – for example the types of risks they want to insure. Liberty will insure cars up to 20 years old, but some insurers may set this limit as low as 10 years.

It is very relevant what vehicle is being insured particularly in respect of potential third party claims, as third party injury claims are the most costly for insurers.

Our prices are set based on various rating factors with age of vehicle being just one of those factors.

Liberty Insurance: Michael

AnCatDubh wrote: »

Here's one thing that puzzled me recently and being in the industry perhaps you'll understand.

Why is it that some (many) insurers will give a discount for having a spouse named on a policy.

ie. Insurance premium without a spouse named = €600, and with a spouse named on the policy being €480

So if I am named, we get a lower premium but as I may never drive my spouses car surely the risk is no greater or lesser to the insurer than if I am not named - yet, being named potentially increases the risk as the insurance company are covering me driving my spouses car rather than relying on my own policy to cover me (albeit TP).

Is it a marketing thing (that they now have the identity of a potential new customer - though i'd guess a relatively expensive marketing measure if it was) or is it in some way a risk reduction measure which is genuinely lowering the risk associated with a policy holder and hence allowing for a genuine lowering of the premium.

Thanks so much if you can clarify that one.

I can see how it could seem odd that you could lower your premium by adding a partner, but this can often be the case (although not always).

Premiums are based on individual insurer’s experience of risks and market segments – that’s what results in the differences you might see.

You might think that having an additional driver would mean more miles driven by the insured car, but the partner or spouse may have their own car (which is a question also often asked by insurers).

Liberty Insurance: Michael

Gloomtastic! wrote: »

Why do insurance companies continue to provide cover for souped-up japanese imports (fart cans) driven by younger drivers? They pollute every town in Ireland with their loud exhaust systems and their disregard for speed limits means they are accidents waiting to happen.

Isn't it time to make driving apps compulsary for all younger drivers to recieve insurance cover?

Hi,

All insurers have acceptance criteria (which varies from insurer to insurer) and this basically mean the types of risks they want to insure

At Liberty insurance we no longer quote for these types of vehicles.

Telematics apps and boxes are relatively new to the Irish market but can lower the price for consumers and is something that we are looking at currently.

sydthebeat

Hi Michael

would you concede that most insurance companies would choose to pay out smaller claims ie less than €10k ish in out of court settlements rather than risk court costs in a lost case.... EVEN IF your insured client is 100% in the right in the situation.
and would you also concede that should the client choose to fight the case in the courts, your indemnity is withdrawn from them?

and would you concede that situations like these are a significant part of the reason insurance premiums have risen on average 70% in the last 3 years?

forumuser

How is the main driver determined - the person who drives the car most days or the person who drives the car most KM's?

Agent Smith

Any Idea Why I was quoted €5200 on a 1.2lt Ford Fiesta 2005? as a 30yo learning to drive?

Agent Smith

Do Liberty insurance insurance cars that are over 15 years old?

Kilough

Hi,

I'm a 29 year old and you won't even quote me on a BMW 320d MSport (2010) with factory spec. I've got 6 years no claims, full license for 9 years. What's the deal? I find this strange as I don't think I should be considered a 'young' driver anymore. Or should I? I always thought the cut off point was when you hit 25.

Liberty Insurance: Michael

forumuser wrote: »

How is the main driver determined - the person who drives the car most days or the person who drives the car most KM's?

The main user of the vehicle should be the main driver and the person who drives the car most often. Typically this would be the person who owns the car and the policy should also be taken out in their name, however, this may vary from insurer to insurer

If you have a driver named on your policy who does does a lot of mileage when they drive your car this should be disclosed to the insurer who will decide the main user and any terms and conditions.

Liberty Insurance: Michael

Agent Smith wrote: »

Do Liberty insurance insurance cars that are over 15 years old?

Yes Liberty Insurance quote for cars over 15 years old.

Hellrazer

Liberty Insurance: Michael wrote: »

Hi,

When we’re providing a quote, we look at both the profile of the car and the driver. All insurers have terms and conditions – for example the types of risks they want to insure. Liberty will insure cars up to 20 years old, but some insurers may set this limit as low as 10 years.

It is very relevant what vehicle is being insured particularly in respect of potential third party claims, as third party injury claims are the most costly for insurers.

Our prices are set based on various rating factors with age of vehicle being just one of those factors.

Michael,

Its great that Liberty insure cars up to 20 years old but I have to ask do you apply a loading on cars between 14 - 20 years old?

Heres an example that I personally have tested with various insurance companies that wont insure / apply a loading on vehicles over 14 years old.
2 Ford Focus cars.
1st one registered in December 2001 - so "technically" 15 years old as 11dxxxxx
2nd one registered in early January 2002 12dxxxx so "technically" 14 years old.

The first one of these I was quoted almost 50% extra for despite being registered only 2 weeks apart.Some companies wouldnt even quote for the 1st car.
So I put it to you-how can a car registered 2 weeks earlier be 50% less safe.It makes no sense at all.

Both cars NCT`d , both the same spec.Even down to the same colour.If I swapped the plates around you wouldnt be able to tell the difference.

I also put it to you that this is not about safety or "older" cars costing insurance companies more but is purely a money making exercise and nothing else.

Jamiered

AnCatDubh wrote: »

Here's one thing that puzzled me recently and being in the industry perhaps you'll understand.

Why is it that some (many) insurers will give a discount for having a spouse named on a policy.

ie. Insurance premium without a spouse named = €600, and with a spouse named on the policy being €480

So if I am named, we get a lower premium but as I may never drive my spouses car surely the risk is no greater or lesser to the insurer than if I am not named - yet, being named potentially increases the risk as the insurance company are covering me driving my spouses car rather than relying on my own policy to cover me (albeit TP).

Is it a marketing thing (that they now have the identity of a potential new customer - though i'd guess a relatively expensive marketing measure if it was) or is it in some way a risk reduction measure which is genuinely lowering the risk associated with a policy holder and hence allowing for a genuine lowering of the premium.

Thanks so much if you can clarify that one.

The reason for the discount - its called Dual Indemnity. Most insurance policies allow 'driving other cars', so if you're spouse is driving your vehicle and hits a third party, your insurance company maybe able to recover 50% of the damage from your spouses insurer, if her policy allows her to drive other cars.

Jamiered

Hi Michael,

Isn't is true that Liberty Insurance, by targeting young drivers are now resurrecting the successful Quinn Direct model of insuring young drivers, why did Liberty move away from this in the first place?

Also, if Liberty are targeting young drivers, the premiums are going to be very high, so how do Liberty think that young drivers are going to take out insurance for gadgets and all sorts.

Surely, at this stage, Liberty need to realise that young drivers just want basic insurance cover and lower premiums.

Jamiered

Dual Indemnity is the reason why some insurers give a discount if a named driver on your policy has their own insurance policy with another company.

Most insurance polices contain a driving other cars clause, so if you are driving your spouses car, and you strike a third party your insurer will cover any third party claims, (not the damage to your spouses car though). Your spouses insurance company will normally deal with the third party claim and recover 50% of the claim from your insurer (Dual Indemnity), in other words, reducing your spouses claim by 50%, hence they discount if a spouse has their own policy.

Liberty Insurance: Michael

Agent Smith wrote: »

Any Idea Why I was quoted €5200 on a 1.2lt Ford Fiesta 2005? as a 30yo learning to drive?

That’s an awful lot of money to afford and we understand the difficulty this can cause.

We can’t comment on your individual quote as there are many different factors that could be affecting your price. Some examples of this are, modification to the car, years driving experience, years licence held, type of licence, additional drivers named, convictions, claims, penalty points held and, the cover selected.

If you’ve received a quote that's higher than you can afford, you can look at ways to reduce your costs, including:

· 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 windscreen cover or breakdown assistance (if optional with your insurer)

endacl

sydthebeat wrote: »

Hi Michael

would you concede that most insurance companies would choose to pay out smaller claims ie less than €10k ish in out of court settlements rather than risk court costs in a lost case.... EVEN IF your insured client is 100% in the right in the situation.
and would you also concede that should the client choose to fight the case in the courts, your indemnity is withdrawn from them?

and would you concede that situations like these are a significant part of the reason insurance premiums have risen on average 70% in the last 3 years?

I'll just quote this as it appears to have been accidentally overlooked.

So, my question.. same.

Renegade Mechanic

Agent Smith wrote: »

Any Idea Why I was quoted €5200 on a 1.2lt Ford Fiesta 2005? as a 30yo learning to drive?

I'll take that.

It's because the worthless bonds they - and most other insurance companies - gambled their already substantial profits on, in the name of more substantial profits, turned out to be, well, erm... worthless...
So now the common person must pay because they sure as all hell aren't going to

Which leads me to my question - how much more are you lot going to load on the common person, just because you greedily gambled your profits on the bond market?
And how much longer do you reckon you can get away with it?

(Note: I'm aware you're just a representative, etc etc....)

endacl

I wonder what the second question to be 'accidentally overlooked' will be...?

:rolleyes:

Galadriel

Liberty Insurance: Michael wrote: »

Yes Liberty Insurance quote for cars over 15 years old.

That's great you quote for older cars but last October I got a quote off you for my 1999 1.4 Peugeot 306 and was quoted €830, I have a full driving license (36 year old) and full no claims and no points etc.

So you are still quoting extra because my car is over 15 years old?

the beer revolu

Why do insurance companies cover people with provisional licences when driving without an accompanying licenced driver?

looksee

I too am baffled by that two drivers being cheaper than one thing.

I had 'the' car registered in my name and insured in my name with my husband as named driver. Owing to his doing several bits of body damage (no other vehicles involved, just a gate post) a claim was made and sorted a few years ago.

Other than that, no claims by either of us and pretty reasonable insurance. He then stopped driving due to ill health and did not renew his license. When I went to renew the insurance - with no claims for something like 20 years, I discovered it would be significantly more expensive just for me.

By chance my adult daughter with full license and no claims etc then needed to be put on my license and for an extra €30 I was able to insure her for the year. I did not get a reduction for a named driver, but on the other hand it was much cheaper than putting her on for a couple of weeks. Its all a mystery.

spaceHopper

Liberty Insurance: Michael wrote: »

I can see how it could seem odd that you could lower your premium by adding a partner, but this can often be the case (although not always).

Premiums are based on individual insurer’s experience of risks and market segments – that’s what results in the differences you might see.

You might think that having an additional driver would mean more miles driven by the insured car, but the partner or spouse may have their own car (which is a question also often asked by insurers).

Where in all of that is the answer to the question he asked? Plain English?

Liam McPoyle

looksee wrote: »

By chance my adult daughter with full license and no claims etc then needed to be put on my license and for an extra €30 I was able to insure her for the year. I did not get a reduction for a named driver, but on the other hand it was much cheaper than putting her on for a couple of weeks. Its all a mystery.

Insurers will generally charge short term rates to add someone on for a couple of weeks so often, once the driver is over a certain age and has a full licence, it will be cheaper to add them for a year than a month.

Barry Badrinath

Liberty Insurance: Michael wrote: »

When we’re providing a quote, we look at both the profile of the car and the driver.

What do Liberty deem as an "ideal" car and driver profile?

Can you tell me what part of the below details justifies a €1,126.44 quote for TPFT.

36 yo male
Based in South County Dublin
Public Sector
Driving 16 years
Full licence 11 years
Full NCD
No claims ever
No accidents ever
No penalty points ever
Low mileage
04 reg 1.9 diesel
Advanced driving courses

Which part of that list shoots a quote over the €1k mark and why?

dunworth1

Senor Fancy Pants wrote: »

What do Liberty deem as an "ideal" car and driver profile?

Can you tell me what part of the below details justifies a €1,126.44 quote for TPFT.


04 reg 1.9 diesel

i would take a guess that its the engine size