Compare Car Insurance Terms: Nominated Drivers
As you conduct an online car insurance comparison, you’ll always be asked by the various company or broker sites you visit to input certain personal information. Car insurance rates are dependent on, among other things, considerations such as the type of vehicle, your age, and the area where you live or drive.
Underwriters assess prospective clients based on the possible risks they present. One factor that often signals a lessening of risks is when there are only one or two drivers who actually operate the vehicle. This is why insurers also ask you to list your name and the names of other people who will drive the car being insured. Those listed will be known as the nominated drivers, and this is a feature that directly affects your car insurance costs.
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Risks when someone else drives your car
Let’s say you’re on the road with a friend and because you’re feeling tired, you ask him to take over for a while. This is not a particularly unusual practice, but there could be consequences to your car insurance if something happens while your friend is driving. You have to keep in mind that insurers underwrite the vehicle and not the driver. In case you’re thinking that your friend has his own car insurance to fall back on, understand that in such a scenario only your own policy is usually relevant.
If an accident does occur while your friend was behind the wheel and you decide to make a claim afterwards, the claim may be rejected by your insurer or you may have to pay a higher excess or other fees. While it’s the car that gets insured, the coverage stated in the policy typically extends only to those listed as the nominated or preferred drivers.
Effect on car insurance excess
As you may know, an excess is a certain amount you agree to pay out of pocket if you make a car insurance claim. It is a part of the possible costs that you will shoulder, but it’s a fixed amount. The rule of thumb is that the higher the excess, the lower the premium tends to be. Besides the basic mechanism of the standard driver excess, there are other types of excess to consider.
The age excess for example may apply to drivers 24 years old and younger, or those aged 25 but with less than 2 years of driving experience. Here, the equation is the younger the driver, the higher the age excess.
Then there is the non-nominated driver excess, also sometimes called unnamed driver excess. This is the possible additional out of pocket expense that you’ll incur in a scenario such as the one described above. When you compare car insurance policies and go through the various product disclosure statements, make sure to look for and understand the provisions that relate to this feature.
Importance of full disclosure
There are several pieces of information you need to prepare and provide once you reach the point of purchasing a policy from a chosen insurer. These include details regarding the vehicle – its model, registration, safety features, etc.
Then there are the details about you, the primary driver/owner. This may include your driving records and your claims history. Insurers need to know how safe a driver you are, if you’ve had any traffic violations or were involved in any road accidents, to assess and determine what rates to charge you. This requirement goes for all the other individuals that may need to be included in the list of nominated drivers, too.
To add or not to add another driver?
This is a choice that senior members of a household that share a single car will typically have to make. Adding drivers to the nominated list may increase your car insurance rates, and this possibility may lead to some hesitation. But what you might save early on in car insurance premiums could be negated by future expenses.
Your insurer may reject a claim or charge you a high unnamed driver excess if there’s an accident while a non-nominated driver is in charge of your vehicle. Just as you can upgrade your coverage anytime, you can always communicate with your insurer to update the list of nominated drivers in your policy.
This article contains general advice about car insurance. The author has not taken into account your financial situation or needs and you should consider whether the advice provided is appropriate for your own circumstances before relying on it.
Filed Under: Understanding Insurance
