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Motor insurance – Are you really covered?

In our experience, many law-abiding and conscientious motorists fail to understand one important aspect of their motor insurance cover for their vehicles.

That lack of comprehension, plus the assumptions that arise from it, might mean those same motorists are breaking the law and risking very hefty fines.

How can that happen?

Your motor insurance policy

Significant numbers of policyholders assume that their existing fully comprehensive policy automatically covers them to drive another person’s vehicle. They often add on provisos such as “providing I have the owner’s approval”.

Unfortunately, car insurance isn’t always so straightforward. In fact, your existing policy MAY NOT cover you to drive another person’s car – even if you have the owner’s permission. Of course, it may well provide such cover but there’s no way of being sure other than by reading your motor insurance policy or asking the provider of your car insurance for confirmation.

How big is the problem?

Some surveys indicate that up to a third of motorists are unaware of this and that presumably indicates that they believe they would be OK and covered when driving another person’s vehicle.

At GSI Insurance, this figure is in line with our own experience of discussing this and related issues, so for many drivers, there is a very real risk.

The other party’s insurance

Something that’s closely related is the assumption that you can drive the vehicle because the owner’s insurance will cover you.

Once upon a time, “any authorised driver” cover was relatively commonplace. That meant that, providing the vehicle’s owner gave their permission and was sure that you had an appropriate licence, then your use of the car would have been covered.

There are though, a few important points to remember here before you rely on this:

  • this type of cover may be far less commonplace today, for cost reasons, than it once was. Today “named drivers” is often used to restrict the number of people authorised to drive the vehicle, thereby keeping the premium as low as possible;
  • some any-driver cover may only cover non-named drivers at third party cover levels. If you damage the vehicle in an accident while driving it, will you be able to pay for its repair? That would be a real possibility;
  • are you certain the other driver is correct when they tell you you’re covered? If they’re wrong and an accident occurs, this could be a case of disputing who-said-what-to-whom and you might still end up with legal and financial exposures.

Not unusual

If this all seems theoretical and unlikely, there is one situation where such issues may be the norm – when you’re buying a new car from a private individual (including test-drives).

Remember that before shaking hands and driving away or even taking the car for a test drive, it’s imperative that you’re clear that you have cover in place. It would be risky to assume your standard car insurance policy will automatically cover you for any vehicle and this should be checked carefully.

The vendor’s policy, even if it was any-driver in nature, would typically cease to be valid the moment that they signed the document making you the new legal owner.

So, be sure that you understand whether your or someone else’s car insurance policy covers your driving situation. It’s typically possible to take out short-term daily cover to deal with exceptional situations such as purchasing or extensively test-driving a new vehicle.

Please don’t hesitate to contact us for further information.

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