Motorists under the age of 18 are entitled to appeal against both the cost of their insurance and refusal of cover under the terms of newly enacted equality legislation. Paul Anderson reports
The Equality Act 2004 extends existing legislation on age-related discrimination to under-18s specifically in relation to motor insurance, meaning 17-year-old drivers and motorcyclists as young as 16 can bring a case to the Equality Tribunal if they believe they are being unfairly treated because of age.
An age-related case was won before the Equality Tribunal last year when a 77-year-old man was refused cover because of his age despite having a seven-year no-claims bonus. The chief executive of the Equality Authority, Mr Niall Crowley, said a number of cases based on discrimination against those on both sides of the age spectrum were currently being prepared and are likely to be heard before the end of the year.
"We’ll be bringing forward test cases, which hopefully will set a number of precedents that will change practices in the insurance industry," Mr Crowley said. Until the legislation is tested, it will be difficult to assess its impact, Mr Crowley continued, adding that the Act, which was signed into law last week contains "exemptions which appear to be quite broad".
Insurance companies will still be entitled to justify their charges based on statistical data, but they have in the past been reluctant to make such information public, which could influence their willingness to contest a case.
Mr Michael Horan, manager of non-life insurance at the Insurance Federation of Ireland (IIF), believes the new law will have little effect on the industry’s practices because company’s base premiums on reliable statistical evidence. "Prices will always differ across different segments of the market," he says. "But, for example, a young male driver is riskier on the road than a mature female, and companies will charge people according to the degree of risk.
"Individual companies base their policies on their own statistics, based on their own client base so they know what the cost of the claims are to them."
In relation to someone unable to find a company willing to insure them, Mr Horan said the IIF oversees a declined cases scheme to insure that all those legally entitled to drive have cover available to them.
Under the scheme, a customer must have sought quotes from three separate companies. In the event that none offer cover, the IIF will instruct the first company contacted to provide cover.
Alternatively, if the driver has been covered any time in the previous three years, then that company will be obliged to offer insurance to the driver, though this would not be applicable for under-18s.
"It’s not compulsory to quote for everyone . . . but in 99.99 per cent of cases the market works well and generally speaking you’ll have a choice," Mr Horan said.
Out of around two million policies sold in the past year approximately 40 were gained through the declined cases scheme, he added.