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Insurance can get complicated when it comes to cars driven by people other than the owner. If a driver gets into an accident and the company insuring the car does not have the driver listed in its policy, they may refuse to cover the damages. So what can you do to cover a second driver?
If someone other than the primary person listed in the insurance policy is likely to be driving a vehicle fairly regularly the first thing to do is check your policy. An occasional secondary driver may be covered by some insurers. If this is not clear in your policy, let the insurance company know you may have an additional occasional driver. If the driver is in a different age bracket or has a different or unknown driving history the cost of the policy may change.
Car accident claims: what could happen?
If a second driver has an accident in your car the worst case scenario is that the insurance company will refuse to pay out on your claim. If you anticipate that a second driver will be using your vehicle on a semi-regular basis then you might want to take a look into arranging for your insurance to cover multiple drivers. Nominated driver insurance policies only cover accidents involving the person or people named on the policy, while other policies include some or all licensed drivers who have permission to drive the car.
Always carefully check the conditions on an insurance policy. For additional information the Australian Securities and Investment Commission can help, and the Insurance Council of Australia may also be of assistance.
Car insurance costs
Nominated driver policies often have cheaper premiums than other policies, and can be a way of saving on the cost of car insurance. However, if a driver not nominated by the policy gets into an accident while using the car, the insurance company may charge a higher excess or refuse to pay.
Inexperienced second drivers
If the second driver of a car is young, particularly a male under 25, or has an unknown driving history, the owner should request that their insurance company specifically cover that driver. Some policies do not cover young or inexperienced drivers unless requested, while others cover almost any driver with permission to drive the car. The excess and conditions of insurance also vary.
Policy excesses and no-claim bonuses
There is an option in some policies for a cheaper premium if the driver agrees to pay a higher excess. Since insurers use many different criteria to work out how much to charge for car insurance, the cost saving will vary from insurance company to insurance company. Restricting the insurance policy to a driver over 30 or parking a car in a more secure location, for instance, can all decrease the cost of your car insurance.
Drivers who haven’t made an insurance claim within a set period of time qualify for cheaper premiums. After checking to see how a second driver may affect their bonus, it may be possible to protect the no-claim bonus by paying a little extra on the insurance premium. Then, if they – or the second driver – do have to make a claim, their discounted premium prices are protected.
Insuring for another driver: weighing the options
For:
- Cheaper if someone other than the owner has an accident
- Ensures a claim can’t be denied because a driver not nominated on the policy was driving
Against:
- Higher premiums
- Can affect size of excess and member no-claim bonuses
