Seven motor insurance firms, which between them write 90 per cent of all premiums in the State, now have access to the database which holds details of all penalty points on a driver’s licence.
While a number of insurers have had access to the National Driver File, operated by the Department of Transport, for some years as part of a trial, access has been widened in recent months and now includes the largest providers of motor insurance in the State.
The companies with access are Aviva, Axa, Allianz, FBD, Liberty, RSA and Zurich.
The insurers sought access so that they could more accurately risk assess drivers seeking insurance and also because of a perceived issue with the under-reporting by drivers of penalty points when it came to applying for insurance.
Insurance costs
Along with the fines and the potential for a driver to lose their licence if they accumulate 12 points, the potential impact to a driver’s motor insurance costs was considered one of the punitive implications of the penalty point regime.
The insurers have differing approaches to premiums for motorists with penalty points. Some use the database before renewal, others mainly when making a quote to a potential new customer.
In general terms, loadings, or additional costs, tend to be applied on drivers with five or more points while most of the insurers are reluctant to take a new customer who has nine or more points.
Penalty points remain on a driver’s licence record for three years, after which they are expunged.
A spokesman for Axa says that between 1 and 3 per cent of their customers have a loading on their premium due to penalty point accrual.
This loading normally applies from five or more points and that drivers on nine or more points will usually decline them as a new customer
Calculating premiums
Mike Horan
of Insurance
Ireland
says insurers accessed penalty points information for the purpose of calculating premiums.
“Penalty points are a rating factor for insurers and are used in conjunction with other information, including a driver’s age, claims record, driving experience and the type of car and its use, among other considerations, in calculating premiums.”
He adds that there is no link between a greater number of insurers having access to penalty points information and recent sharp increases in motor insurance premiums.
Mr Horan says the cost of motor premiums is generally dictated by claims and that the motor insurance market in Ireland is experiencing extreme volatility and which is driving up premiums.
He points to the average whiplash settlement in Ireland being €15,000 in Ireland – three times higher than the average in the UK.
He has also called on the Government to continue to invest in road safety and in particular, road traffic enforcement.
