Car insurance a legal requirement for rich people?

daveharnett

Any car insurance policy I have seen limits the insurer's liability to a certain figure (a few million iirc). Is it still a legal requirement to have car insurance if you have a similar amount in the bank to cover any crashes you might cause?

It would seem counter-intuitive that (for example) Sean Quinn would need to have car insurance, given that it could be provided by a company which he owns.

Gone Drinking

Legally, you have to be insured. If you were a millionaire you'd still insure your stuff, what if it was stolen? Just because you have the money to replace it, doesn't mean you want to make a loss. Its not just about accidents.

Plus if you were killed in the accident, the government can't just assume you were willing to pay out whatever for the other people involved and take it from your bank account. Not to mention a bad accident can rack up millions in hospital costs aswell.

It wouldn't make sense.

maidhc

daveharnett wrote: »

It would seem counter-intuitive that (for example) Sean Quinn would need to have car insurance, given that it could be provided by a company which he owns.

It isn't really. It is much more straightforward to claim from an insurance company than an individual, not to mention the fact he may be non resident (e.g like Denis O'Brien).

The way things are is the only workable way for it to be.

daveharnett

Gone Drinking wrote: »

If you were a millionaire you'd still insure your stuff, what if it was stolen? Just because you have the money to replace it, doesn't mean you want to make a loss. Its not just about accidents.

I wouldn't spend €5 to insure a €20 mobile phone. I reckon there's less than a 25% chance it will get lost or stolen, so it makes sense for me to take the risk on myself. If it is lost or stolen, i'll get a new one, no big deal.
Why would you insure your stuff, if you could comfortably afford to replace it?
Insurers aren't charities, they charge enough money to cover your risk, and make a profit. If you could cover the risk yourself (Without noticing the difference in your bank balance should something happen), why would you want to give them the profit?

Gone Drinking wrote: »

Plus if you were killed in the accident, the government can't just assume you were willing to pay out whatever for the other people involved and take it from your bank account.

No, but the other people involved could make a claim against your estate, in the same way they would make a claim against an insurance co.

Gone Drinking wrote: »

Not to mention a bad accident can rack up millions in hospital costs aswell.

True. However, insurance companies limit their liability to ~5,000,000 per accident. Private individuals could be sued for the whole cost of the accident, not this arbitrary limit. Private individuals can also have more money. To go back to my earlier example. Sean Quinn owns quinn direct. If he has a fiver in his pocket, he worth at least €5 more than the insurance company insuring him.

daveharnett

maidhc wrote: »

It isn't really. It is much more straightforward to claim from an insurance company than an individual, not to mention the fact he may be non resident (e.g like Denis O'Brien).

The way things are is the only workable way for it to be.

I see your point. On the other hand, if you own a field, and somebody hurts themselves in said field, you could be held liable (unlikely unless you are farming landmines, but bear with me). By the same logic, why are we not legally required to hold public liability insurance for all property we own?

Rippy

IIRC, the Gardai don't have road traffic insurance. Their liability is underwritten by the goverment. Same may apply to gtoverment staff cars and some other govt. owned vehicles. Defence forces also?

scab-e

It's difficult for rich people to self insure as they would need to form an insurance company first to issue the insurance disk, register with the MIBI etc. It does happen that very rich people with driving convictions who look for supercar insurance are asked to lodge an extremely large excess.

OP states that all insurance policies are limited to x million liability, however, I believe Irish law requires unlimited liability for 3rd party personal accidents.

-Chris-

Why would this rich person not insure third-party only, paying the bare minimum for insurance. If their vehicle needs replacing/repair they can fork out themselves, but if they get in a major accident noone's going to knock on their door and ask for a cheque for a million in hospital fees.

R.O.R

I know some of the larger companies in Ireland are self insured (one large supermarket chain for sure), but I'm not sure of the in's and outs of the system. They have insurance discs on all their company vehicles, issued by Allianz or someone similar, but in the event of any claim they don't receive any money from the insurance company.

Keith C

Sure if their millionaires, im sure they'd prefer to to pay a few grand to insure their bentleys rather then having to fork out millions of their own money if someone is a paraplegic (spelling?) after an accident.

BTW its cheaper for insurance companies if someone dies in an accident then if someone is left in a wheelchair for rest of life.

maidhc

daveharnett wrote: »

I see your point. On the other hand, if you own a field, and somebody hurts themselves in said field, you could be held liable (unlikely unless you are farming landmines, but bear with me). By the same logic, why are we not legally required to hold public liability insurance for all property we own?

Without sounding smart the reason is because people who own property won't drive away with it and not leave a trace. E.g. they are a good mark and are generally worth suing... unlike Joe Bloggs in a 96 Sunny.

There is of course merit in the argument that rich people shouldn't have to pay insurance, but it would be unworkable.

green-blood

well...

you legally have to have insurance, but there is no reason why you have to be "insured".... stay with me.

if you were weatlhy enough you could become a name in Llouyds of london. You are not legally required to insure yourself thru the cartel!!

Wishbone Ash

daveharnett wrote: »

I wouldn't spend €5 to insure a €20 mobile phone. I reckon there's less than a 25% chance it will get lost or stolen, so it makes sense for me to take the risk on myself. If it is lost or stolen, i'll get a new one, no big deal

That's not a valid comparison.

3rd party insurance is legally required while on a public road. Your telephone is unlikely to cause serious injury or death to a 3rd party. The authorities aren't really concerned about any self-inflicted damage to your vehicle or injury which you may cause to yourself, hence the reason that comprehensive insurance is not a statutory requirement.

Jo King

It was the law for a number of years up to the 1970's for drivers to either have insurance or a certain sum of money on deposit. It is possible to self insure by having an excess on the policy up to the insurance limit ( there is no unlimited cover for third parties). The premium will be virtually nil in that situation since the insurer will be entitled to full indemnity against the insured.

Traumadoc

I heard quinn insurance was originally set up to insure their own cement trucks.

ninty9er

R.O.R wrote: »

I know some of the larger companies in Ireland are self insured (one large supermarket chain for sure), but I'm not sure of the in's and outs of the system. They have insurance discs on all their company vehicles, issued by Allianz or someone similar, but in the event of any claim they don't receive any money from the insurance company.

UPS bought an insurance company a few years back to insure their European fleet as it worked out cheaper than forking the cash over to someone else. They still have to pay it from one part of the group to another, but it makes no difference to their consilidated cash position.

pow wow

In the UK 'rich' people don't have to have insurance; from recollection they have to either lodge x amount with some government body or prove they have that amount available. I can't remember how much it was....my insurance exams were years ago:D I want to say 250k sterling but that could be wrong.

It might be similar here, I know it was never common knowledge in England either.

L1011

Dublin Bus are 'insured' by posting a bond with - I believe - the Financial Regulator to cover liabilities. Realistically they pay out themselves - SLOWLY.

Steve

AFAIK, you can self insure here by lodging the appropriate sum to a bond and getting approval from the minister for transport.

It doesn't make financial sense though as you'd lose far more in interest than you would save paying an insurance policy.