Car insurance is a tricky beast. You have to have it, you don't want to pay for it - insurers, having access to a captive audience, love to force the issue.
Perhaps that's why this week the arrival of a new provider into a crowded but pricey market has created a large degree of interest, especially when it is trumpeted as providing low cost cover for those at the margins of the market - either driving high-price, high performance cars or those whose risk-worthiness with other companies has been compromised by a claim and the loss of a no-claims bonus.
But while the offer obviously has its attractions, there are caveats to the scheme run by new insurance player XS Direct.
The product on offer from the new company does away with the no-claims bonus system. Instead drivers get a cheaper quote in exchange, effectively, for less liability from the insurance company. Whereas in the case of a claim to most companies the insurer will pay out the whole of the value of a claim, XS Direct's product comes with an insurance excess which means that you pay for the first several thousand euro in damages in the event of a claim and they pick up the rest of the tab.
For male drivers that excess is €4,000, and for females the figure halves. So, in the event of a male driver making a claiming of €6,000, XS Direct will only be liable for a €2,000 payout. Hence the low premiums.
While the penalty in the event of a claim may sound prohibitive, the scheme obviously has its attractive points. If you are the owner of an expensive, fast car, the likelihood is that you are being heavily penalised by insurance providers for the privilege of driving such a valuable, high-performance machine. Add in the loss of a no-claims bonus to that cost, and the end result could be a premium which makes the heart stop and the wallet recoil in fear.
However, those owning such vehicles are also likely to be in possession of the funds to take the potential hit of a €4,000 excess in the event of an accident. The question for others, of more moderate means and modest machinery is whether a competitive premium is worth the risk of the excess?
Quoteline Brokers is one of the agencies dealing in the XS product and managing director Leo O'Callaghan admits that the system has its pros and cons. "It's definitely not for everyone," he says. "It is a niche product aimed at one or two very specific areas of the market. The first of those is people who drive expensive, high performance cars. The second is for people who have lost their no claims bonus."
The company cites two examples: a customer with a Porsche Boxster who lost his no-claims bonus and was quoted €3,000 by his regular insurer, only to be quoted half that figure by XS Direct, and a 32-year-old woman with no no-claims bonus, who was quoted €850 as opposed to €1,400 from her previous insurer.
However, the danger exists that in a bid to bypass high costs, drivers on the margins of cover will take on an excess risk they cannot afford. "Customers will have to know what they are getting into," says O'Callaghan. "They will have to read the fine print. It is up to brokers to inform people of the cover they are getting, and it will be no different with the XS product."
O'Callaghan also makes it clear that XS Direct's product is not a panacea for all insurance ills. "They are not quoting young drivers," he notes. "I believe they may do so down the line, but at the moment they are not in that market. It is definitely more aimed at those driving expensive vehicles."
He also downplayed any suggestion that the company could run into trouble from mid-income customer unable to pay the excess in the event of an accident. "I don't think that will impact on the company itself. At the end of the day they will pay out the percetage they are required to and the rest is up to the customer to sort out with a garage."
That, though, may lead to problems with dealerships' faith in customers insured with XS should a scenario develop whereby bills for repair work are left unpaid by cash-strapped customers.
Michael Horan of the Irish Insurance Federation told The Irish Times that ultimately it is up to the consumer to decide on the right product for their circumstances.
"It's now a very competitive market in Ireland and that is a good thing for the consumer as premiums are falling," he says. "And really the only advice we can offer is that people shop around. Not only for the best price but also for the cover that suits them.
"As ever, it is a case of caveat emptor."