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Comprehensive Car Insurance - Named Driver Requirement?

Discussion in 'Insurance Law Forum' started by Glenda, 16 July 2014.

  1. Glenda

    Glenda Member

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    Hi I was wondering if I was to take comprehensive car insurance out for my under 25 year old son in my name (given the car is registered in his name) and not name him as a driver on the policy, would the car be covered if there was a car accident and he was driving?
     
  2. Worldly1

    Worldly1 Well-Known Member

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    You'd have to ask your insurer - they would be able to answer such a question - or you may be able to find the answer in their product disclosure statement. It may well be the case that the car is covered but there's a larger excess for an unnamed or under 25 driver, but best to check each policy case by case.
     
  3. Tim W

    Tim W Lawyer

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    I know that this sort of thing happens a lot, but it's a really bad idea.
    And of course, the insurance industry is well aware of the practice.

    Basically, what people who do this are actually doing is committing fraud on the insurer.
    This is because at some point, somewhere in the process of creating the policy contract,
    the insured will have to tell the insurer some kind of an untruth, or somehow deceive them
    (such as by deliberately withholding the name of young driver) in order to get a reduced premium.
    In simple terms - lying to the insurer to get a financial benefit.

    It's a well established principle of law that the insured has a duty of complete good faith*
    in respect of an insurance contract.
    Apart from being law, it also quite likely to be (read: "is almost always") a T&C of the insurance policy that an insured disclose all information material to the issuing of that policy.

    The seemingly little lie you propose is grounds for them to refuse a claim - because you have not dealt with them in complete good faith.
    Not only can they refuse to pay, but the policy itself can be voidable.

    Apart from an accident claim not being paid, where voidability matters is if there is finance on the car.

    Consider that a person can have (read: "almost always has") a duty under the loan contract
    to keep the vehicle comprehensively insured.
    So, if a person's comprehensive policy is void, then they may be end up in breach of the loan contract too.

    I hope it is now starting to become clear that the little lie you are contemplating
    is really a bag of spiders, and would be best avoided.


    * uberrimae fidei
     
  4. Glenda

    Glenda Member

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    Thank you Tim that makes a great deal of sense, unfortunately my naughty son had accumulated enough loss of demerit points to lose his license as a probationary driver, he then went and bought a car that needed to be insured to secure his loan - long story short - he is looking at nearly $3,500.00 to insure the car comprehensively, I did manage to find insurance for him about $1,000.00 cheaper however still very expensive in my eyes, and I was looking to reduce that for him, but certainly not worth it if it is null and void if you ever need to claim - so thank you for taking the time to answer my query, I appreciate it - and hope my son will be much more responsible in the future.....
     
  5. ms1234

    ms1234 Member

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    Hello,

    Apologies, I'm new and not sure how to create my own thread.

    My ex-partner was unlicenced (drink driving suspension) and drove a car registered in his name into a teacher's car in our street. He told me a few days later (after questioning) that he had in fact told the insurance company that it was me who was driving at the time. I didn't feel safe (bad relationship) reporting it to the insurance agency that he had fraudulently claimed this.

    Now I've left the relationship I want to report him and want it taken off my driving record. How do I go about this? Will he be charged with fraud? Am I complicit because I didn't tell the insurance company as soon as I found out?

    Thank you in advance for your time
     

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