Who’s behind the wheel?

Why it’s important to list the regular driver of your car for insurance purposes.

We all have policies, be they for retirement, life or household and vehicle insurance, to name a few. Now the one thing they all have in common is fine print. And how often do we cringe when hearing the term “did you read the fine print” being bandied about when claiming or cashing-in?

Well it’s because fine print is there for a reason. And that’s to be read and understood. So with that in mind, let’s talk vehicle insurance. Your son or daughter won’t stop nagging you for a car, or your wife is tired of sharing yours with you. So to make your family life a happy one, you buy that cool SUV you’ve secretly been craving and donate your old one to a deserving hand-me-down family member.
Then it’s ‘crash, boom, bang’. No worries, I’m covered, they’ll cough up, you think.

Think again.

If the incorrect person was noted as the regular driver of your hand-me-down, claims are often rejected, given the fact that the person behind the wheel is deemed not to be the car’s ‘regular driver’. This can cause a furore of frustration and financial complications for policyholders who do not realise the insurance implications of handing their car over to somebody else.

So let’s define the fine print to ensure your vehicle is appropriately covered.

The ‘regular driver’
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.

The regular driver’s profile affects 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.

Listing the incorrect regular driver and why it’s wrong
Each premium is individually calculated and younger drivers usually pay higher premiums than their parents do (and consumers are aware of this) – so 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.

Insurance is based on transparency 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 been dishonest, your policy is voidable at the discretion of the insurer, which means they don’t have to pay your claim.

Don’t worry, you can still let someone else drive your car
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 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 and not under the influence of any substance that could influence driving ability. You may have to pay an additional excess, depending on the terms of your policy, but you will be covered. Remember, some insurers ask you to name all the drivers. So check before you hand over your keys.

Honesty is the best policy
If your child is going to be the regular driver of the car, being truthful about it has two benefits: First, your claim will be valid provided of course that the rest of the terms and conditions were adhered to. Second, your child will build an insurance history that will stand them in good stead when they eventually take out insurance in their own right.

Remember to update your insurance policies
Life changes. So update your vehicle cover accordingly. Whether another person will be using your car for a while, you’ve moved house or jobs (different parking arrangements/security etc.), let your insurer know. And, if you pass the car onto a family member, update the details of the regular driver.