Which Drivers Should I List on My Car Insurance?
There is a lot of confusion among car insurance customers over who needs to be listed on the policy as a driver in order to have claims paid. In reality, the driver-related guidelines for a car insurance company to pay a claim are actually quite simple. The dilemma that most people face, however, is whether they are willing to pay extra on their premiums to have extra drivers listed on their policy, or whether they would prefer to assume the risk themselves. Today we go through what can seem like a complicated car insurance decision, but is actually quite simple.
Listed drivers and insurance cover
In Australia, the term ‘listed drivers’ on a car insurance policy means any person that has been notified by the customer to the insurance company as a potential driver of the insured vehicle and approved by them. Most good car insurance companies will not make any distinction between the level of cover you get for the regular driver, as opposed to listed drivers.
A standard option you may also see on a car insurance Product Disclosure Statements is that of “Listed drivers only” – where claims will not be paid unless the driver of the vehicle at the time was listed on the insurance policy. By taking this option, the customer may reduce their premium significantly as it limits the possible risk to the insurance company.
Additional excess for unlisted drivers
If your car has been involved in an accident while a driver who was not listed was driving the insured vehicle, your insurance company may still provide insurance cover, however an additional excess will be payable. If you’ve chosen the option explained below, though, this might not be available to you.
Reducing premiums by paying claims for listed drivers only
If you never allow anyone except the listed drivers on your car insurance policy to drive the vehicle, some car insurance companies will offer you a ‘Listed Drivers Only’ option, which reduces you premium. If you take this option, they won’t pay any claims for damage to your own car or other cars while non-listed drivers are in control of it.
So what’s the dilemma?
When you look at the issue like that, it seems pretty simple! Just list everyone who is likely to be driving your car; pay an extra excess if someone who is not listed has a crash in our car; and be aware that if you’ve chosen reduced premiums with the ‘Listed Drivers Only’ option, your claim will not be paid for an unlisted driver. So where’s the dilemma?
For many people, the hard decision is whether to list every person who will be driving the vehicle, even occasionally, or to leave them off the policy and get a reduced premium.
The fewer drivers listed on an insurance policy, often means the premium is lower. However, the car owner assumes the risk of having to pay for damage or a higher excess if an unlisted driver crashes the car.
The more drivers that are listed on a policy, the higher a premium generally is. However, it also provides additional peace of mind… and isn’t that what insurance is all about?
We would always recommend listing all of the drivers that will be using your car more than once a year. It is also sensible to take the reduced premium for ‘Listed Drivers Only’, if you are very confident that other people never drive your car. The reason that we take out car insurance is to mitigate risk… why take more of it on your own shoulders?