Drivers warned of practice that could put no claims discount at risk

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While the possibility of being added as a named driver to someone else’s annual policy has its perks, not many are aware of the fact that if the named driver takes part in an accident “the policyholder’s no claims discount could be at risk”, according to temporary car insurance experts at GoShorty.

A no-claims discount reduces the price of a driver’s car insurance if they don’t make a claim.

This accumulates every year if motorists don’t make a claim. On top of that, if drivers don’t make a claim for five years they could even earn as much as 60 percent off on insurance costs.

However, as soon as a driver makes a claim, if they were at fault, they could lose some of the discount, if not all of it.

Andy Moody, director at GoShorty, said: “What many don’t take into account is the fact that this discount can be put at risk by adding a named driver to your policy.

“If, for instance, the policyholder has accumulated a no-claims discount history over the years, they will be the ones losing it in the case of an accident, even if the named driver was the one driving at the time of the crash.

“Future premiums on the policyholder’s policy might also be affected, while the named driver’s no claim discount would not be affected, nor would the premiums on their future policy.”

To get a better sense of people’s knowledge about the risks of adding a named driver to a car policy, the experts decided to look at people’s individual experiences.

Of the people they asked, most were aware of the fact that adding someone as a named driver can put the no-claims discount at risk.

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However, nobody knew that adding a named driver can also result in an increase in future premiums for the policyholder, even after the named driver has been removed from the policy.

Emily, from Loughborough, shared her own experience saying: “My partner, who was a named driver on my policy, crashed and wrote off my car in a faulty accident.

“Unfortunately, this meant I lost over half of my no-claims discount as it was reduced from five years to two years.

“And before this happened I hadn’t realised my no-claims could be affected so much.”

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With approximately 126,247 road accidents being registered in the UK every year, it is not advisable to leave a no-claims discount up to chance by adding a named driver to it, except if absolutely necessary.

If another driver needs access to a vehicle, a good alternative to consider is temporary car insurance, according to the experts.

This option will not only keep the no-claims discount safe, but it will also avoid the administration fees that drivers would have to pay when adding someone to their car insurance policy.

Mr Moody added: “It will allow you to share the driving between you and others, and also will enable you to borrow and legally drive cars during short periods if you do not have one yourself, giving you monthly, daily or even hourly cover.”

It’s sometimes possible for drivers to make claim and still keep their no-claims bonus. There are, however, some caveats.

Drivers can sometimes claim without affecting their no-claims bonus in these circumstances:

  • You are in a car accident that absolutely wasn’t your fault, where the liable driver’s insurance covers repair costs.
  • If you’re in an accident with an uninsured driver that wasn’t your fault, and you have comprehensive cover
  • If you are simply claiming for windscreen damages, a breakdown, motor legal expenses or emergency medical treatment
  • Finally, you may be able to claim without affecting your NCD if you protect it.

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