Young Drivers - Should I insure in my parents name?
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For many young drivers, affording the costy of car insurance is more challenging than passing your driving test. Many younger drivers consider insuring in their parents names. Equally, many parents who are often organising the insurance for their son or daughter also consider insuring in their name with their son or daughter as a named driver. What are the consequences of this and what is the best way to arrange affordable insurance for a young motorist.
Provisional Drivers
Some people have a misconception that you cannot insure a car unless you have a full driving licence, this is not the case. Learner drivers can insure vehicles and the premium they pay is often similar (and sometimes cheaper) than the premiums for drivers who have just passed their test. This is because some insurers rate the risk of a learner driver supervised lower than a new driver who is unsupervised.
If you are a learner, driver, you do not have to insure in your parents name and can insure a car in your own name. Click here for our learner driver insurance page. Below you will find an explanation of the advantages of insuring in your name.
Young Drivers with a Full Licence
If you are a young driver who has just passed your test, you may be itching to get on the road and drive. Insurers see you as a very high driving risk, statistically you are far more likely to make a claim than a more mature driver and indeed, that claim is likely to be more costly to the insurer.
Young drivers can get insurance though and it is worth comparing as many prices as you can from as many sources as possible. It is also worth considering taking a pass plus course as car insurance with a pass plus discount can be substantially cheaper for a first time driver.
Vehicle Ownership and Fronting
Although insurers take differing views on vehicle ownership, as a rule of thumb, the owner of a car should also be the policyholder. This satisfies the principle of insurable interest. Certainly the main driver of a car should be the policyholder.
If a young driver owns a car and then insures it in a parents name with the younger driver as a named person on the policy, you are running a considerable risk. Fronting, as it is called, is the practice of insuring in another persons name just to get a cheaper policy. It is fraud and if proved can lead to void policies which may mean claims not being paid, driving without insurance convictions for the young driver and even prosecution for fraud. Although the drastic consequences may only happen rarely, it is not worth the risk and you may be missing out on benefits further down the line.
Many people ignore these risks but can easily be caught out when a loss adjuster reviews a claim. Particularly if it is for a theft of vehicle from a school or university!
Introductory No Claims Bonus
If you are looking for first time driver car insurance, then click on the link to visit our page. First time drivers can benefit from an introductory bonus. Some insurers essentially give a significant discount to new drivers. This can reduce the premium significantly.
No Claims Bonus and Younger Drivers
The main benefit of a young driver insuring in their own name is that they build their own no claims bonus. No claims bonus scales give huge discounts. If you are a driver looking for a zero no claims bonus insurance quote, follow this link.
Generally after a single year of driving then the young driver can get a 40% discount off the following years policy, this is in addition to other discounts. Those other discounts will include those for being a year older and having had a licence for a year longer too. Another reason that the renewal will be significantly cheaper is that more insurers have schemes for drivers with a years no claims bonus. More choice generally means better rates!
It is often the case that a young driver will pay less than half of their first years premium at renewal.
Parents who insure a son or daughter on their own policy may not see the same significant drop in premium. When the younger driver eventually insurers in their own name, they are still likely to face a significant premium.
Schemes such as Direct Lines transfer of bonus for younger drivers may apply to their own scheme but other insurance providers are not guaranteed to accept it.
Summary
If you know that a younger driver is the main driver on a policy, why not bite the bullet and insure in their own name? The no claims bonus they earn will stand them in good stead for getting affordable rates at their renewal and you can have utter confidence in the claims process.
Superquote.com understands that for many people finding cheap car insurance is a chore. *We transfer young driver clients directly to Insureyourmotor.com for car insurance, to try and save you money. By clicking on the banner above, we will take you directly through to the Insureyourmotor.com site where you can get a quote online.