Parents – be careful about insuring your child as a named driver
According to a recent report many parents in the UK are engaging in an illegal activity whereby they insure their kids’ cars in their own names, and then have their child added as a named driver on the policy. Of course, the reason why many parents are doing this is to cut back on the cost of cover, which can be very costly for younger and more inexperienced drivers. However, many experts state that these parents are doing their kids no real favours.
Experts state that by putting kids on their own policies rather than getting them their own insurance cover parents are denying kids the chance to earn any no claims bonus, which means that no matter when they take cover out in their own names it will still be expensive. In addition to this, state experts, this is an illegal practice, and could result in the insurance being classed as invalid in the event of an accident, so in the long run it could cost a lot more.
According to one industry official: ‘…parents should not be tempted to hide a young motorist as a named driver on a policy. Where fronting is exposed, insurers will cancel the policy or charge the correct premium as a lump sum. Drivers who have had a policy cancelled will have to declare this on any future insurance applications and will find it harder to buy. Insurers can also refuse to pay for any claims or can settle a third-party claim and recover the cost from the parent as the policyholder.’
She also stated: ‘If the insurer declines a claim, the young driver could be treated as uninsured and could be fined hundreds of pounds and receive six penalty points, which means an automatic ban for new drivers. They will also face higher insurance costs in future.’
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