So often vehicle insurance, life policies or even educational policies are taken out to secure our future. Yet, so many customers do not read the fine print. It is absolutely imperative that those long-paged documents are actually read and understood.
It’s a situation many of us are all too familiar with. You choose to upgrade your car and pass on your existing one to a child or spouse, only to have it involved in an accident.
Naturally, your first port of call is your insurer – after all, you’ve been a loyal customer for years, and now it’s time for them to pay up.
Right? Not so fast.
In circumstances where the incorrect person was noted as the regular driver, claims are often rejected, given the fact that the person behind the wheel is deemed not to be the car’s ‘regular driver’. Inevitably, this can be a cause of immense frustration – not to mention financial complications – for policyholders, many of whom simply fail to realise the insurance implications of handing your car over to somebody else.
So what defines a ‘regular driver’ and what steps should you take to ensure your vehicle is appropriately covered?
Here are a few key answers to satisfy those burning questions:
1 What does ‘regular driver’ mean?
Insurance companies view the regular driver of a car as the person who drives it most often in a given period. This can be tricky to define if your family has one car that is shared between multiple parties, but it should almost always be clear who drives the car most often. If you’re in any doubt, tell your insurer about any individuals who drive the car on a regular basis.
2 How does the regular driver affect premiums?
Premiums are calculated according to the size of the risk you potentially pose. For example, people who have had their driving licences for less than a year are more likely to become involved in an accident than those who have been driving for 20 years.
Simple economics dictate that the bigger the probability of a pay out, the bigger the premium should be, so if your child is using the car to attend university, they’re likelier to be a greater liability than you would be on the road.
3 Why do some policyholders name the wrong regular driver?
Because each premium is individually calculated – for example, younger drivers usually pay higher premiums than their parents do (and consumers are aware of this) – people are tempted to be economical with the truth. For example, a father might claim to be the regular driver of a car that he’s actually buying for his teenage son to avoid paying a higher premium.
4 What’s wrong with doing that?
Insurance is based on good faith and mutual trust and because premiums are based on information disclosed at the time of signing on, the insurer will always check the regular driver as part of the claims validation process. If they discover you’ve not been honest, your policy is voidable at the discretion of the insurer, which means they don’t have to pay your claim.
5 Does this mean I can’t ever let another person drive my car?
No, of course you can. It’s perfectly normal that sometimes you might want to let your spouse, child or a friend drive your car. If your car is involved in an accident while someone else is behind the wheel, your insurer will still cover you, provided of course that the correct regular driver is noted on your policy and the driver adhered to the policy conditions e.g. driving with the correct licence type for the vehicle in question and was not under the influence of any substance that could influence their driving ability. You may have to pay an additional excess, depending on the terms of your policy, but you will be covered.
Some insurers may ask you to name all the drivers, so check with them or your policy document to be 100% sure before you hand over your keys.
6 Full disclosure is always the best strategy
As with all insurance matters, honesty is the best policy. If your student son or daughter is going to be the regular driver of the car, being honest about it has two benefits: Firstly, your claim will be valid provided of course that the rest of the terms and conditions were adhered to. Secondly, your child will have an opportunity to build up an insurance history that will stand them in good stead when they want to take out insurance in their own right in the future.
7 Remember to update your insurance policies
Things change and you should make sure to update your cover to reflect developments in your lifestyle and assets as and when it happens. If you’re going to be away for a couple of months and someone else will be using your car in that period, or if you have moved to a new address or changed jobs (which results in a change to daytime parking arrangements or what the vehicle is being used for), let your insurer know. And if you pass the car on to someone else in your household, don’t forget to update the details of the regular driver with your insurer.