Insurance open to 'abuse' (The Irish Times)

04 November 2011

The issuing of motor insurance without checking the driver's licence first is open to "massive abuse", according to a district court judge.

Arklow District Court judge William Hammill made the observation after hearing a series of motoring cases in which defendants did not have valid driving licences or were disqualified but had secured insurance.

Speaking after the case, a spokesman for the Irish Insurance Federation (IIF) accepted that current system was "imperfect" and agreed it was possible for a disqualified driver to get insurance. "In such cases the driver's own damage claim will be invalidated so there is no instance where someone is getting away with this," said Niall Doyle, public affairs spokesman of the IIF.

This issue is one reason why the IIF has sought access to the National Vehicle Driver File (NVDF) which holds records of a driver's licence status, including disqualifications.

One reason why a motorist might apply for insurance without having a valid licence is to keep policy costs low. For example, if a motorist is banned for drink driving the cost of their policy will typically double or triple once they notify their insurer. Thus some drivers opt to renew their policy during their period off the road and hope their insurer will not discover the disqualification.

Drivers are obliged to inform their insurer of any serious motoring convictions, but the majority do not, according to Brian Dooley commercial motor manager with Hibernian. He says a "name and shame" approach using a central database would see motoring convictions have more impact, as well as improving the underwriting capacity of insurers. As there is no database of drink driving convictions, the IIF scans local newspapers and sends a file of court reports to motor insurers to follow up.

At the court hearing, a Quinn Direct representative said applicants gave details on the phone before being sent a proposal form. She said this formed a contract and the information was received in good faith.

In a statement after the court hearing Quinn Direct said: "What we do is in line with the rest of the motor insurance industry in Ireland and the UK. To check every licence would not be practical and would place additional costs and inconvenience on consumers."

According to a report in the Wicklow News, Judge Hammill said such a system would work well in a perfect world "but in an imperfect world your system is open to massive abuse".