Be careful with misguided advice on car insurance

IT can be dangerous to rely on advice from garages about motor insurance. This is demonstrated by a recent experience of a friend.

Because of the estimated cost of fixing mechanical problems with her car she decided to search for a replacement vehicle.

She was lucky. An identical vehicle was quickly found – same make, model, colour and year of registration.

After a satisfactory test drive, and checking of all relevant documentation, she closed the deal.

Then she rang her motor insurers and explained it would be necessary to cover two cars for a week or so while disposal of the old car was arranged. They charged €50.

I will tell you another time about her subsequent experiences with the insurance company.

Anyhow, she also told her garage to ‘get their skates on’ in disposing of the old car so that further insurance costs could be avoided.

The proprietor told her that because the car was parked on his premises, which is private land, there was no need for motor insurance. That answer was wrong. It has been wrong since the EU motor insurance directive in 1972.

In fairness, that issue was only conclusively clarified by the European Court of Justice (ECJ) in September 2014.

This case involved Mr Damijan Vnuk, a farm worker, who was injured when he was knocked off a ladder by a tractor that was reversing with a trailer into position to unload hay at his place of work.

The motor insurer of the tractor refused to deal with his claim on the basis that compulsory motor insurance only applied to vehicles on public roads. That Slovenian insurance company was supported in its arguments by some other EU member states including Ireland.

However, the ECJ pointed out the requirement for compulsory motor insurance relates to ‘motor vehicles’ regardless of where the vehicle is being used.

This decision caused consternation among the insurance lobby; it also upset some motor sports enthusiasts.

The European Commission then undertook a consultation process with various interested parties across the EU and published its findings on May, 24, 2018.

That report confirmed the jurisprudence of the ECJ that compulsory insurance is required to cover activities “consistent with the normal function of a vehicle” regardless of the location and “irrespective of whether it is stationary or in motion”.

The definition of ‘a public place’ under the Irish Road Traffic Acts is not confined to roads and streets but also encompasses any “other place to which the public have access with vehicles whether as of right or by permission and whether subject to or free of charge”.

Obviously, Irish legislation on compulsory motor insurance requires amendment to reflect the 2014 ECJ decision in the Vnuk case – as well as some garage proprietors need to be updated.

● Dorothea is probably best known as Chair of the Motor Insurance Advisory Board – a previous statutory investigation into the cost of insurance which reported in April 2002.

Its 67 recommendations were accepted by government and the cost of motor insurance reduced by 40pc over the following decade.

Those measures included establishment of the Personal Injuries Assessment Board of which she was Non-Executive Chair until April 2014. She has been highly critical of the culture of the insurance industry that increased premiums by 70pc over a three-year period to 2016.