Insurance Anomaly

[Angus]

Daughter No. 1 has gone to Uni, so we're selling her car. That means insuring her on one of our cars, namely the wife's Polo GT, for her to drive when she's home.

When we renewed in September, the insurance on the Polo was £177, and the best price for the two of us now was £137 (albeit with a ridiculous excess).

Lizzy is 20, with 3 years NCB in her own right and a full licence since June 11.

So, on to one of the comparison sites.

With Lizzy as a named driver, the cheapest quote was £620, but insuring the Polo in Lizzy's name with us as named drivers gave a quote of £557. OK, the excesses were a little different, and the first quote had a protected NCB, but why the difference? Especially as both quotes were with the same company.

[jonquirk]

I've discussed this phenomenon with colleagues in the past and the consensus that emerged is that insurance companies appear to believe that vehicles which are driven by multiple drivers have fewer collisions.

This may be because each driver is aware that it is not just themselves that is inconvenienced if the vehicle is off the road as the result of a collision but the other insured drivers as well.

One colleague reduced his premium by adding his neighbour as a named driver even though the likelihood of that person ever driving the vehicle was very low.

It is a sort of reverse fronting, fronting being the practice of adding an inexperienced driver to a policy as a named driver when they are in fact the main user of the vehicle. In your case the main driver is the policy holder and the additional drivers would drive the vehicle less often.

[Angus]

But these quotes were with the same 3 drivers, just in different names.

And adding drivers doesn't always reduce the cost - I enquired about adding my brother (older than me, clean licence, accountant) and it doubled the premium

[jont]

Maybe there's a presumption that the named driver will be the person doing most of the driving, so the risk is weighted to that person. Countering that will be the common use of Fronting, so it may be the insurance companies automatically load against that.

Then there may be the fact the computer detects multiple quotes from the same address with different details and thinks you're trying to game it too.

Probably too many factors/variables for it all to be "logical"

[waremark]

Are you thinking about who ends up with a no claims bonus? Does that change your choice?

Either way, the price is nothing like the horror figures which are often quoted for young drivers, and presumably the genders have now been equalised. You must be lucky with your post code.

I would be inclined to ring the insurance company of choice and discuss it.

[Angus]

Fronting is an interesting point and if that's the case, this is a good way to discourage it.

Building NCB wasn't a consideration, but the additional premium is more than Lizzy's premium for her Honda. Though I suppose an additional £140 for a Polo GT over a Honda Jazz is a bargain.

Also, the premium is low compared to some of the horror stories you hear - we are lucky with postcode

[michael769]

This may be because each driver is aware that it is not just themselves that is inconvenienced if the vehicle is off the road as the result of a collision but the other insured drivers as well.

This is a factor. A bigger factor is that the type of driver who behaves recklessly on the road happens to also be the type of person that is unwilling to allow anyone else to drive their car, and so failing to add others onto a policy is considered a risk factor. There are of course exceptions when the extra driver has a very poor risk profile.

Another major factor is that most folks who have more than one driver do so with their spouse and people in long term relationships take less risks in their life generally (in other words if you have someone in your life to add to your policy you are a lower risk overall). Which is why you are more likely to get reductions for adding family members to the policy than other folks.