Named driver insurance and NCB

Young people cannot get or afford their own insurance because they are in the high risk category. They are already hit with a high premium of thousands of pounds even before they have done anything wrong.

By going as an additional driver on a policy can save you money but be aware that named drivers no claims bonus does not really count. Named drivers can be used to reduce insurance costs and here are two ways:

The first way is fronting. Fronting is when a parent insures their child’s car in their own name and adds the child as a named driver. This is illegal if the child is the main driver. If the insurance company digs out the truth later, the insurance will be invalid.

Fronting is usually used by young drivers to bring down their insurance costs. Insurance works out cheaper this way as the main risk is based on the parent who is a lower risk to the insurance company than the young driver.

Some keep their ‘official’ address as their parent’s address to avoid paying higher premiums for a high risk area even if they are living in rented accommodation and working in full-time employment/studying elsewhere.

The drawback of fronting is that insurance companies do not like it at all as it costs them lots of money when things go wrong. So this is highly discouraged and is against the law to try that.

While this will reduce your insurance cost, you have to be careful and maintain a clean driving report. If you have a car accident while in this policy, it will affect yours and your named driver’s No Claim, and your premium will also go up.

It is claimed that some 250,000 young drivers resort to fronting.

The second way is to insure a car in your name and add an older named driver. Insurance companies will reduce your car insurance premium if you have an older driver named on your policy. It often works best when adding an older female family member or work colleague who may drive your car. Some people put their mothers as the named driver even though their mothers never drive the car.

Please note that having a named driver does not automatically lower the premium. The choice of your named driver to your policy can either increase or lower your premiums. The insurance company will assess the named drivers age, gender and driving report.

If the named driver is young, the premium is more. If the named driver has a poor driving report, the premium is also more. So it is better to include a named driver who is older than thirty, has a long driving record and has a clean driving report. A female driver is preferrred as females are considered safer than male drivers.

So which way should you adopt?

Becoming a named driver on a parents policy is fine when you are learning to drive in their car as the parent is still the main driver. Once you have your own car, get your own policy and start building up your own no claim bonus (NCB).

Putting your spouse as the named driver is a practical solution as long as your spouse does not have a previous claim or traffic conviction. Since the husband and wife do things together as a couple, such as travelling together, be it for vacation or shopping to buy groceries, they can take turns to drive the car. Having your spouse as a co-driver for long trips reduces the likelihood of a car accident. This car insurance tip can save you money on your car insurance.