Naming Young Drivers on their Parents' Insurance Policy
Insuring your first car may seem an impossibly expensive task, so we're often asked questions like:
- Can (and should) I get cover on my parents' insurance policy?
- Would it be cheaper?
- Do you get a no claims bonus as a named driver?
- Can learner drivers be covered on their parents' insurance policy?
- Can I drive my parents' car on a provisional licence?
- What would it cost to add a provisional licence-holder to my parent's insurance?
- When should I get an insurance policy in my own name?
The answers to most of these questions depend on your circumstances. Arranging to be covered on your parents' policy, with you as a named driver, may seem like a sensible move if you're trying to cut costs. In the right circumstances, it's perfectly ok to be insured this way; but there are several reasons why it's not always a good idea and in some cases you might even be breaking the law!
When it's ok to be covered by your parents' insurance
Regardless of whether you still have a provisional driving licence or you've recently passed your test, your parents' insurance company might agree to add you to their policy if:
- You are only an occasional driver (i.e. your parents are the main drivers, but you have their permission to drive the car sometimes) and
- Your parents are the registered keeper of the vehicle (i.e. DVLA records show that your parents own the car)
The insurance company will charge an additional premium to add you as a named driver to your parents' policy (all insurers calculate premiums slightly differently, so we can't say exactly how much it will be). Your parents might ask you to pay this extra premium, but the cost is likely to be less than if you took out your own insurance policy.
Disadvantages of piggy-backing your parents' insurance
- You're not earning a no claims bonus while you're just a named driver on someone else's policy, though some insurers will give an introductory discount to named drivers. We explain the whole no claims bonus system here if you're interested
- You can only go down this route if you're just an occasional driver on a car that doesn't actually belong to you. If you own the car and you are the main driver, you're breaking the law - it's called "fronting".
Car Insurance and the Law - Illegal "Fronting"
Parents have to tread a fine line if they're trying to help their children get cheaper insurance. If they take out a policy in their own name, naming the child as an additional driver, or they add their child to their existing policy, they are breaking the law if their son or daughter is actually the main driver of the vehicle. Premiums are calculated largely on the risk presented by the policyholder, so pretending that an experienced parent is a more regular driver than their inexperienced child is fraudulent.
This practice is called “fronting” but many parents and young drivers are unaware that it's illegal.
Such situations often come to light when a claim is submitted, but far from settling the claim, the insurance policy might be cancelled and the young man or woman could find themselves in court, charged with driving without valid insurance.
When you should get a policy in your own name
As a rule of thumb, if you are the owner of a vehicle, or drive it more regularly than anybody else, in all likelihood you ought to be the policyholder too.
Do you get no claims bonus as a named driver?
Only the policyholder can earn the full rate of no claims bonus, so until a young driver has an insurance policy in their own name, they won't build up the usual no claims bonus. However, when you are ready to buy your own policy, some insurers will give an introductory discount if you've been a named driver on another policy, subject to proof of no claims.
Building up your no claims discount in a policy of your own is the fastest way to reduce your insurance premium.
Provisional Drivers Insurance
You don’t need a full driving license in order to take out insurance in your own name. You can take out your own insurance policy even on a provisional license, and it’s particularly recommended that you do so if the car you are learning to drive in is owned or driven solely by you.
It’s common for parents to add their son or daughter to their own insurance as a named driver while they are still learning to drive, but the same legal situation prevails here as mentioned before if the child is actually the main driver of the vehicle. The legal hot water you could find yourself in isn’t worth the risk of a lower insurance premium.
The cost of insurance for a young driver on a provisional license may not be too much different to that for a driver having just passed their driving test. With the same ability to start building up their no claims bonus immediately, it makes sense in the long run.