One-in-three Irish motorcyclists are in insurance limbo due to the collapse of British insurance company, Independent Insurance.
Some 8,000 motorcyclists and 1,000 classic car drivers were advised yesterday by Carole Nash, an insurance intermediary, to take out alternative insurance cover immediately. All Carole Nash's Irish business was underwritten by Independent Insurance.
There has been some confusion among policyholders because the letter from the company states that their policies are still valid and they are legally entitled to "ride on the public highway".
However, a spokesman for the company confirmed that as there were unlikely to be sufficient assets to meet the liabilities of Independent Insurance, claims under its policies were unlikely to be met in full or at all.
Carole Nash has agreed a last-minute deal with Royal & Sun Alliance and is offering to arrange alternative cover up to existing policy renewal dates through its Dublin office. However, motorcyclists and drivers will have to pay a new premium for their new policies.
According to Carole Nash, it has agreed with Royal & Sun Alliance that the premium required will be pro rata to the unexpired part of the original policy. In other words, a policyholder with nine months to run on an existing 12-month Independent Insurance policy will have to pay three quarters of the original premium again.
Royal & Sun Alliance confirmed it would provide alternative cover for the Irish policyholders and said Carole Nash insurance brokers would be able to advise on premiums.
Irish policyholders have expressed dismay at the losses and uncertainty and many voiced their concerns on yesterday's Liveline programme on RTE Radio 1.
A spokesman for the Irish Insurance Federation (IIF), Mr Michael Horan, said its advice to motor insurance policyholders was to take out alternative insurance cover now. For those with claims arising since provisional liquidators were appointed to Independent Insurance on June 18th or before, Mr Horan said the situation would become clearer later this week.
The key player for policyholders in this insolvency scenario is the Policyholders Protection Board (PPB) in the UK. There is no equivalent body in the Republic although the Motor Insurance Bureau may have some role. According to the provisional liquidators, the PPB is working closely with them "in order to put arrangements into place to commence payment in respect of claims where eligibility has been confirmed".
In Mr Horan's view, Irish policyholders need to wait for the PPB and the provisional liquidator to work out whether they are eligible in respect of claims which pre-date the notification from Carole Nash.
"Whatever happens, the innocent victim will be compensated. If you have an accident and injure someone or do damage to a third party, that has to be covered and it will be." The Motor Insurance Bureau of Ireland normally pays out in the case of damage or injury caused by an uninsured driver. Last week, the Tanaiste, Ms Harney, said she would examine whether it would be possible to get compensation for Irish businesses left without cover after the collapse of Independent Insurance.
A spokesman for her Department said the matter was now one of immediate concern to private policyholders who were out of pocket.
He said the Department was equally concerned and was establishing precisely what the implications were for Irish policyholders.
"We are currently in discussions with the UK authorities, the European Commission, the Attorney General and the Irish Insurance Federation and several issues are still to be resolved," he said.
