It is unlawful to use a mechanically propelled vehicle unless it is insured against third-party liability (as a minimum) under an approved policy of insurance. EU Directives and the Road Traffic Act require motor insurance policies to cover liability for negligence of and the consequences of injury caused by the driver. The purpose is to protect the accident victim.
There are certain minimum mandatory terms which are required in insurance policies. The insurer must cover liability to persons injured or who suffer property damage arising from negligent use of the vehicle. This covers liability to passengers in the vehicle, as well as liability to third-party persons who are injured.
There are limitations on certain type of clauses in the policy. It is not possible to exclude cover where driving is by unlicensed drivers or persons, is in breach of condition or without consent. Insurance cover cannot be terminated before its due date other than, following 10 clear days written notice. There are minimum liabilities which must be covered [€200,000?]
Liability may not be excluded for public service vehicles, vehicles for carriage of more than one person, set liability to passengers may not be excluded for public service vehicles, vehicles for more than one passengers or other station wagons or state cars or similar vehicles fitted with seats.
The Scope of Compulsory Insurance
Compulsory insurance is required in respect of the use of a vehicle in a public place. This means any road or street, to which the public have access. This may include where they have access either by permission, by right or by permission. It could, therefore, include private grounds. A private car park or estate is a public place for the purposes of these requirements.
The insurance must be in force with an authorised vehicle insurer. The policy must be an approved policy containing the minimum terms and conditions specified by law.
There are a wide range of conditions which are specifically prohibited. These include
- conditions requiring things to be done after the accident,
- certain conditions limiting or restricting the persons covered (except conditions limiting cover to one person ),
- requiring third-party consent or
- limiting cover to persons holding a licence
Conditions by which the liability of the insurer depends on such matters as the following are void;
- weight, construction, maintenance,
- the keeping of anything on the vehicle,
- times or areas,
- numbers of persons carried,
- physical characteristics
Condition by which payment may be refused if the policy was obtained by fraud and misrepresentation or false statement to which the claimant was not a party may not be raised unless the matter is the subject of a criminal conviction.
Policy Terms I
Motor policies are not absolutely standard, but they must contain the terms and conditions required by road traffic legislation. Otherwise, they will not qualify as approved policies. Standard private motor policies cover persons using or driving a car for social, domestic, and pleasure purposes. This would not cover business trips.
The insurer indemnifies the insured indemnifies insured against legal liability arising from death, personal injury or property damage, arising from the use of a motor vehicle. Insurance policies may cover the insured while driving another car, he holds or held a licence and is not disqualified.
Certain policies limit coverage to the insured and persons driving with the insured’s consent. The vehicles must be used with the permission of the insured, and not driven by a person who to the insured’s knowledge, does not hold a valid licence and is not disqualified.
Motor policies usually require that the vehicle is maintained in a roadworthy condition and that care is taken to safeguard it from loss and damage. The insured must take reasonable steps to prevent accident, injury, damage, or loss. It is not possible to rely on breach of this condition to disclaim liability to the third party. However, the term is enforceable against the insured.
Policy Terms II
Sometimes, there are exclusions in relation to property stolen from the car or theft of the car, unless locked or if the keys are left in the ignition. Sometimes, there is an exclusion for loss or damage to the car while the driver is under the influence of alcohol or drugs or has been convicted in a prosecution for under drink-driving. In these cases, the insurer may be obliged to compensate third-parties, ut may refuse payment to the insured for damage to the car.
Policies usually require that disputes in relation to the interpretation of the policy shall be referred to arbitration. There is commonly a time limit, less than the standard statute of limitation period, commonly within a year.
Policies frequently entitle the insurer to recover monies from the insured, which they have paid out under the policy notwitstaniddng breach of the policy, because of the compulsory terms in the policy. After settlement or judgement, the insurer may recover from the insured the amounts, which it would not otherwise have had to pay e.g. due to breach of policy condition.
Generally, policies cannot be cancelled during their term without at least 10 days’ notice in writing. The insured is usually entitled to a return of premium pro rata. The general principle is that the insured is not entitled to a refund of premium, if he cancels during the term. Any right to return of premium depends on the terms of the policy. The Insurance certificate must be returned in the event of cancellation.
Recovery from a Insurer
Where a person recovers compensation from the owner or user of a mechanically propelled vehicle by court judgment, he may recover directly against the insurer. The injured person concerned, may serve notice in writing of the claim or judgement on the insurer. The insurer will not pay any greater amount than the amount which the owner or user has already paid to the injured/hurt claimant,
Where the claimant has obtained a judgement, the insurer must pay so much as the sum as is covered under the insurance policy. This deemed a valid payment as against the insured. Where monies are not recovered from the owner or user, it is possible to apply to court to compel the insurer to pay. The insurer may not refuse payment, even on the basis of fraud or misrepresentation, which may otherwise invalidate the policy, unless it is the subject of prosecution and conviction. The insurance company is jointly liable with the insured person.
Issues may arise where employees are injured in a motor vehicle. Standard motor and employee liability policies are often endorsed to ensure that there is no overlap of cover. Issues may arise where a vehicle is adapted for commercial use, does not contain seats and where employees are carried, notwithstanding the absence of accommodation. This may not require to be covered under the motor insurance
An employer is liable for the negligence of his employee in driving a vehicle in the course of employment. In addition, Road Traffic legislation provides that where a vehicle is driven with the consent of the owner, the owner is deemed responsible for the negligence of the user. The owner will be entitled to the same defences as the driver. It is not clear if the latter provision applies companies. However, the principles of vicarious liability will apply.
Motor Insurance Bureau
Each EU state must set up a body to provide compensation for personal injury and property damage caused by uninsured drivers. The relevant body in Ireland is the Motor Insurance Bureau of Ireland. The MIBI operates under an agreement between the State and the motor insurance companies.
Compensation may be paid under the agreement for injuries and damage to an innocent third-party victim of an accident in a public place caused by the use of a vehicle, which is not insured or for which there is insurance, but which is ineffective.
For a vehicle which has been stolen or used without permission, or where the vehicle is untraceable of unidentifiable, the claim is made directly to the MIBI. The MIBI are made parties to any legal proceedings, the claim for compensation should first be made to MBI. Court proceedings should not be issued unless the offer is refused or is advised to be inadequate. There are certain conditions in respect of a claim to MIBI
The Irish Visiting Motorists Bureau operates on a similar basis to the MIBI. It provides compensation to victims of accidents occasioned by foreign registered vehicles. Irish policies now provide minimum cover to comply with EU Directives.