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Dáil Éireann debate -
Wednesday, 27 Jan 1988

Vol. 377 No. 1

Written Answers. - Vehicle Insurance.


asked the Minister for Industry and Commerce if he intends dealing with the anomaly in vehicle insurance whereby some companies quote premiums based on values submitted by the insured, while, in the event of a claim, pay out only on their own assessment of value, rather than the declared value on which premiums are levied.

The object of insurance is to put the insured in the same financial position after a loss as he was immediately before that loss. Accordingly, claims are paid on the basis of the real value of a vehicle as opposed to any higher declared value. Otherwise, a claimant could have an incentive to create a loss which would put him in a better position after the event than before it.

It is the responsibility of the policyholder to ensure that his vehicle is valued at its current market value because at the end of the day there is nothing to be gained from over-insurance.