6 reasons why you could be refused car insurance
Being denied car insurance can leave many drivers scratching their heads and wondering why? Unfortunately, car insurance companies can refuse to cover your car if they deem your vehicle or your driving to be too much of a financial risk.
Insurers can refuse to provide motorists with car insurance cover for a variety of reasons. Whether you’re shopping around for a new insurance policy or renewing your policy, if an insurer deems it contrary to public interest to provide you with motor insurance, you may be refused cover.
Here we take a closer look at the most common reasons why motorists may struggle to obtain cover and what you can do if you find yourself in this sticky situation.
1. Car modifications
It’s possible to modify a car to improve its performance or style. If you decide to make any changes to the manufacturer’s original design of a vehicle, such as changing the suspension system, this will be considered as being a modification.
While there is no law against modifying vehicles, it’s important to carry out changes to an appropriate safety standard. Too many modifications can not only affect the road handling of your car but can also impact your insurance.
When taking out insurance, you’ll be asked whether your car has any modifications. Insurers may feel there’s a higher risk of a car with modifications getting into an accident.
If you decide to carry out modifications on your vehicle, you must let your insurer know and have modifications completed at a professional garage.
Car modifications that increase the security of your car, such as extra locking devices, won’t affect your insurance because they decrease the possibility of your car being stolen.
On the other hand, modifications that result in you breaking the law can cause your insurance to become invalid, or may result in you being refused cover. These modifications include:
- Sound modification, e.g. to the exhaust system.
- Illegal changes to wheels and tyres.
- Tinted windows (windshield and front side windows) that restrict more than 65% of sunlight.
- Adding certain lights, such as under-car neon lights which may distract other motorists, and blue flashing lights, which are reserved for emergency services.
2. Excessive penalty points
No one wants to have penalty points on their licence. However, the reality is that many Irish drivers have penalty points on their driving records. In 2021 alone in Ireland, over 540,000 motorists had penalty points on their licences.
Penalty points are endorsed on a person’s driving licence by An Garda Síochána to indicate that they’re guilty of a driving offence. Driving offences may include speeding, using a phone while driving, breaking red lights, or driving without motor insurance.
Penalty points impact the price you pay for car insurance, and even the ability to obtain cover.
A driver who accumulates 12 penalty points within any given three-year period will be automatically disqualified from driving for six months.
Typically, the cost of your car insurance will increase alongside the number of penalty points you have. However, drivers with 5 penalty points may even struggle to obtain car insurance as many providers will deem them uninsurable.
3. Returning emigrants
Those returning to Ireland after living abroad may also struggle to secure car insurance cover. For those who have been living outside of Ireland for two years, they will have lost their previous no-claims bonus and many insurers refuse to give proper recognition to driving experience abroad. Essentially, they will be treated like a novice and their driving history abroad will be disregarded.
For example, a driver with a built-up no-claims bonus could emigrate to the US, live there and drive there for three years. However, when they come back, they may find this driving experience is not recognised.
As a result, many emigrants find it would be easier for them to continue to pay out their car insurance in Ireland while living abroad, than trying to take out new insurance upon return.
4. Your car has been imported
As a result of the UK's exit from the EU, Irish consumers have faced higher import fees and more complicated declaration forms if they wish to import a car from our nearest neighbour. In turn, this has led to an increase in interest of those looking to import a car from further afield, such as from Japan.
If you import your car from the UK, it should have no impact on your car insurance.
However, there may be negative repercussions for those who import a vehicle from a country other than the UK.
Some insurers may refuse to offer you car insurance if your vehicle has been imported from another country, such as the US or Japan. There are numerous reasons for this:
- If you import a car from Europe or the US, the vehicle may not be constructed to the same standards as in Ireland. For example, the car could be a left-hand drive. Left-hand drive cars are more difficult to insure, as they are more likely to cause accidents.
- If you have a left-hand drive car, it’s possible to get it modified, but this is costly and modifications will need to be approved by your insurer.
- It may be troublesome and costly to source spare parts for imported cars, making them more expensive to repair.
- Some cars, particularly those from Japan, are generally built to a higher specification. They may have higher performance and larger engine sizes, which can be seen as being riskier to insure, due to the faster speeds they can be driven.
- If you are looking to import a car, keep in mind that you may run into difficulties when trying to get it insured. Check with individual insurers to see if they cover imported cars.
5. A cancelled policy
If you’ve had a car insurance policy voided or cancelled by an insurer, getting new insurance can prove to be difficult.
There are many reasons why an insurer may decide to cancel or void your policy. The most common reasons include:
- Non-disclosure: If you fail to disclose necessary information when applying for car insurance, you may face the cancellation of your policy. Examples of non-disclosure include not reporting motor convictions or vehicle modification
- Non-payment: If you miss your insurance payments or are regularly late with payments, your policy may be cancelled.
- Fraud: If you make a fraudulent claim, your policy may be voided by the insurer from the start date, as though it never existed. As a result, any claims in progress will be rejected. Examples of fraud include fronting, pretending your car has been stolen, or providing deceptive information in an attempt to reduce your premium cost. This may include lying about your car being kept in a garage overnight or using another address to register your car.
When applying for new insurance, you must declare any policy that was cancelled or voided by a car insurer. You may struggle to find new cover, as a cancelled policy serves as a red flag.
You can avoid policy cancellation by being as honest as possible and disclosing any changes in circumstances, such as a new job or address, to your insurance provider.
6. The age of your car
It is true that some insurers are willing to provide car insurance cover for cars up to 20 years old, provided they have passed their NCT. However, having an NCT for an older vehicle does not guarantee you will receive a quote. In fact, often drivers whose cars are over 10 years old can struggle to obtain insurance, even if they have passed their NCT.
Unfortunately, insurance companies do not deny older cars based on their roadworthiness but because they consider older cars to be a bigger financial risk and believe those with older cars are more likely to make a claim.
Why is this?
Firstly, if an older car breaks down or is in an accident, it may be more difficult to source parts for the car as they may not be in production anymore. Coupled with the fact, there are also fewer mechanics who know how to repair older cars, the cost of finding the labour and the replacement parts becomes a lot more expensive for the insurance company in comparison to newer cars.
As well as this, many older cars lack modern safety features or their safety features don’t adhere to modern safety standards. This is seen in particular with airbags and seat belts, meaning the car's occupants are at a greater risk of being injured than those in newer cars. As a result, they are more likely to make a personal injuries claim.
Seeing that in 2018, insurance payouts for soft tissue injuries from car accidents in Ireland made up 80% of all payouts and were three times the cost of those seen in the UK, you can understand why insurance companies would hesitate to insure older cars.
Lastly, older cars are considered to be vehicles that are at a higher risk of theft. This is because they may not have modern alarm systems, and are therefore easier to steal.
What can I do if I can’t get car insurance?
If you’re unable to obtain motor insurance, you can contact the Declined Cases Committee operated by Insurance Ireland, the representative body for insurance providers in Ireland.
Insurance companies can refuse to sell you car insurance as long as they are not in breach of equality law and when providing you with cover would be contrary to public interest. The refusal must be in writing and given to you within five business days of refusing you.
Declined Cases Agreement
Under the Declined Cases Agreement, the insurance market must not refuse to provide insurance to a motorist who has approached at least three insurers and has not been able to obtain cover.
If you contact the Declined Cases Committee, they will usually approach the first insurer you tried to obtain cover from and will get a quote on your behalf.
You should keep track of the order in which you tried to receive your quotes, and keep a paper trail of refusal notices.
You can also contact the Declined Cases Committee if you feel a quote is too high.
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Become an expert in car insurance
You can learn everything there is to know about car insurance so that you can find the right premium for your vehicle by reading some of our other car insurance articles.
- Getting car insurance for the first time can be a daunting experience. We have compiled a list of what you need to know when taking out a policy as a first-time buyer.
- Here are 12 things to consider when taking out car insurance.
- You can tailor your car insurance policy to suit your needs with optional benefits. Learn all about additional extras in this guide.
- To avoid overpaying on your car insurance, read about the most common mistakes people make when selecting cover for their car.