Driving on their own four wheels

It can often be seen as the easiest and cheapest option for policyholders to add their children onto their own car insurance policy when they reach driving age. 

However, this is often not the best direction to go in.

Over 26% of accidents in the UK involved at least one young car driver aged 17 to 24 (Roadsafe Accident Statistics). By adding your children to your own policy, you are considerably raising the probability of a claim and the possibility of losing your own no-claims bonus. This would then inevitably lead to a significant rise in your insurance premium.

It is also very important to remember that “fronting”, i.e. naming your child as a secondary driver, when they are the main driver, to reduce the cost of insurance, is illegal.

Insurance companies share information between themselves and other agencies to help spot the signs of attempted fronting. In addition, insurers are investigating claims in more detail and could reject a claim when fronting is suspected. If this is proven the insurance policy will be invalid and the driver will face a fine and penalty points for driving without insurance. Both drivers may also face much higher insurance premiums in the future and could even be turned down by many insurers, as they must disclose if a previous policy has been cancelled or refused.

Whilst it may initially be more expensive, there are many benefits for your children in starting their own personal car insurance policy early, including:

• The ability to start building up their valuable no claims discount immediately, even sometimes before passing their driving test.
• Keeping costs down a little by adding yourself onto your child’s policy as a named driver.
• Specialist car insurance policies for drivers under 25 often offer telematics (a GPS tracker fitted to the vehicle). By tracking how your children drive, these policies can often prove considerably cheaper than non-specialist options, as long as the driver demonstrates sensible driving skills.
• Policies aimed at young drivers can also often educate your children on driving safely through educational materials and give discounts for taking courses such as the pass plus scheme.
• Some insurers will also discourage driving at times when accidents are most likely to occur (e.g. at night) by placing exclusions on the policy.

Another option, is to investigate whether you could qualify for a high net worth insurance policy. If you pay a substantial premium for your home insurance and drive a luxury/performance vehicle, it is likely that by adding an additional vehicle for your child to create a ‘family fleet’, could have potential savings. It will also allow you to drive each other’s vehicles on a comprehensive basis as well as wrapping all your cars and home insurance under one policy.

In the long run, there are many good reasons and benefits for young drivers to take out their own insurance policy, plus opportunities for them to learn to drive more responsibly and safely.

If you want to discuss the best options for your children’s car insurance please contact Willis Insurance & Risk Management.