It is important to be aware of the terms and conditions of your car insurance policy. It is also important to remember that your car is not insured without full disclosure of who the regular drivers of that car might be. The vehicle owner can also nominate specific drivers of that vehicle.
The Ombudsman for Short-Term Insurance has warned consumers to ensure that they fully understand and appreciate the basis upon which motor vehicle insurance is taken out and the category of persons who are insured whilst driving a motor vehicle belonging to an insured.
Why is “regular driver” and “nominated driver” important for car insurance?
“Motor vehicle policies are commonly underwritten on the basis of a “regular driver” or a “nominated driver”, however in insurance, a regular driver is not the same as a nominated driver”, says Ombudsman for Short-Term Insurance, Brian Martin. These concepts are used in order to assess the risk associated with the insurance of a particular motor vehicle and the premium to be charged. The identity and profile of the driver of a motor vehicle is obviously an important factor in risk, which the insurer is being asked to assume as well as the premium to be charged.
Certain policies of insurance define a “regular driver” as “the person who uses the motor vehicle the most frequently and more than any other”, but this definition is not without its difficulties. The concept is not always capable of precise definition. Where a policy is underwritten on a “regular driver basis”, other persons may drive the motor vehicle in addition to the regular driver, provided that they are in possession of a valid driver’s license and that they are only the secondary driver. It is vitally important that consumers correctly identify the regular driver in instances where more than one person will drive a motor vehicle, to be insured on a regular driver basis and that they provide this information to their insurance company or broker.
A “nominated driver” policy, on the other hand, only gives cover to persons who are actually nominated and recorded as a nominated driver on the policy of insurance. Any person who is not nominated and recorded, as a nominated driver on the policy schedule will not be covered.
What will happen if the vehicle is incorrectly insured and incorrect information disclosed?
The Ombudsman says that consumers should take heed of the fact that if a vehicle is incorrectly insured or incorrect information is furnished to an insurer concerning either a regular driver or a nominated driver, this can result in a policy being declared void from inception, or the insurer having no liability to compensate for any loss or damage. “Utmost care must be exercised in ensuring that the correct information is given to an insurer and that any change in one’s circumstances or day-today living is immediately communicated to one’s insurer or broker so that the necessary endorsements or changes to the policy can be made. Changes could include any change of address or change in the use of a motor vehicle”, says Brian Martin.
If consumers are in any doubt as to whether their motor vehicle is correctly insured or not, they should seek professional advice from a licensed broker, insurance advisor or attorney prior to taking out the policy. This will avoid many problems that could arise at a later stage.