A new directive by the Euopean Union, due to come into force next year, will allow Irish motorists to insure cars in other EU member-states and legally drive the car with full coverage in Ireland, writes David Roe.
According to an agreement reached last week in the EU's Council of Ministers, the Fifth Motor Insurance Directive, which is due to be passed before Christmas 2004, will give all European drivers full access to the motor insurance market of all other EU countries.
Although the exact terms of the directive have yet to be finalised, the European Commission has welcomed the decision made at the Council of Ministers.
In a statement following the agreement, the Commission said that the directive would introduce a "truly free and competitive European insurance market (and) should give consumers a progressively wider choice of more attractive motor insurance products, at lower prices."
The proposal specifies that insurance cover should remain valid for the whole term of the contract irrespective of temporary stays of the vehicle in another member-state.
In this way, practices such as inserting into insurance contracts clauses establishing that the contract will be cancelled if the vehicle remains outside the member-state of registration for longer than a specified period, will be prohibited.
New regulations regarding motorists' accident records will also be contained in the new directive.
The Commission said it was aware that some citizens have difficulty at the end of their insurance contracts in getting a statement concerning their accident record.
The lack of such a statement, the Commission said, makes it more complicated to get a new contract with another insurer, especially when the customer wishes either to change his residence to another member-state or to get cross-border insurance.
In order to avoid these problems, the proposal obliges the insurer to provide policyholders with a statement concerning their claims record at the end of the contract.
The directive is also likely to contain a new minimum insurance amount for personal injuries of € 1 million per victim, plus an option for member-states to apply a minimum amount of € 5 million per accident. Pedestrians and cyclists will also be designated as specific categories of accident victims.
"The aim of this directive is to make life easier for motorists travelling within the EU, by addressing a number of problems which they frequently encounter today," said Mr Frits Bolkestein, Internal Market Commissioner.
"European citizens have the right to use, buy and sell their vehicles in other member-states. So we need a system that makes it as easy as possible to get insurance cover, for whatever circumstances may arise."