Personal injuries insurance through the TAC is compulsory with car registration. Drivers can also take out insurance to cover damage they cause to other people, or pay a higher premium to cover their own damage as well. The way value is calculated is important for car insurance. There are time limits for claims and accidents must be reported. Claims can be refused for failure to disclose, or other reasons including the driver’s blood alcohol level.

Types of insurance

There are several types of insurance that relate to motor cars and motor car accidents. One type of insurance relates to personal injuries from car accidents; the other types of insurance relate to property damage. As the different types of insurance are often confused, it is useful to distinguish here between them.

1 Transport Accident Commission (TAC) levy (i.e. “compulsory third-party” insurance): This levy must be paid each year when you renew your car registration. The TAC levy only covers claims against you by other people for personal injuries.

2 Property damage insurance: This is not compulsory but only the most foolhardy deliberately choose to go without cover. There are three types of property damage insurance:

a Comprehensive insurance: This is the top of the range insurance. It covers you for damage to your own property, and for damage you may cause to other people’s property.

b Third-party, fire and theft insurance: This is the middle range insurance. It covers claims against you by other people for damage to their property and covers loss or damage to your vehicle in two situations (i.e. fire and/or theft).

c Third-party, property insurance: This is the minimum cover available. It covers claims against you by other people for damage to their property. It covers repairs to your car, up to a limited amount only, and only when the other driver caused the accident, can be identified and is uninsured. This limited benefit is known as the Uninsured Motorist Extension. If your car is not worth insuring, or you cannot afford comprehensive insurance, then you should have this insurance at least, since without it you could be liable for enormous amounts (e.g. if you crash into a BMW). This type of insurance costs only a fraction of the amount charged for comprehensive insurance. Also, if you upgrade your property damage insurance in the future, most insurance companies will take into consideration the fact that you previously held insurance (and so you may get a discount).

When looking for insurance, check the benefits and the price – things like “market value” or “agreed value” if the car is a total loss, the availability of a hire car, whether you have a choice of repairer, and what amounts are claimable if personal goods are lost.

Losing the right to claim on your insurance

Insurance policies require you to report any accident or damage as soon as possible after the accident. If you do not intend to make a claim, at least report the incident by phoning your insurer. Be sure to get the name of the person who accepts the report.

Normally, insurance policies state that you are not covered if, at the time of the accident, the car was being driven by a person who:

had an illegal blood-alcohol content (BAC);

was driving under the influence of intoxicating drugs; or

refused to undergo a breath test.

Your claim may also be unsuccessful if the damage was sustained while the car:

was being used for racing;

was overloaded or in an unsafe or unroadworthy condition;

was being driven by an unlicensed driver; or

had been modified in any material way from the manufacturer’s specifications.

In addition, if you have failed to disclose:

the correct purchase price;

your full driving history; or

any drivers under 25 years old,

then your claim may be reduced or denied, or an extra premium may be charged.

Always read the policy carefully to check exclusions and/or endorsements. If in doubt, seek clarification, in writing, from the insurer.

For more information about illegal BAC, driving under the influence of drugs, breath tests and unlicensed drivers, see Driving offences.