Handing over your car keys could be costly

Last updated on 12th December, 2017 at 04:24 pm

If you share your car with a family member, or pass it on to your son or daughter, you need to be aware of the consequences if you don’t declare the new regular driver’s details with your insurer.  

Many of us rely on our own transport to get from A to B. As a result, there are more than 10-million vehicles on South African roads, according to recent statistics by the electronic national administration traffic information system (eNaTIS). In many cases, people share vehicles or pass them on to family members as they upgrade, thereby changing the profile of the regular driver of the insured vehicle.

Declare a vehicle’s regular driver

If you’ve just handed over your car keys to your son or daughter on a permanent basis, you need to change the profile of the regular driver on your insurance policy. Completing the driver section of a vehicle insurance policy is obligatory because it affects the way a client’s risk profile is rated. When someone other than the policyholder drives the insured vehicle regularly, you should be aware that this affects your vehicle’s insurance cover. If the regular driver is not correctly or truthfully declared in your insurance policy, and a different individual who drives the car regularly is involved in an accident, your claim may be rejected or not paid in full.

What is a regular driver?

A person is considered the regular driver of a vehicle if they drive the vehicle more often than any other person in a 12-month period.

Why does it matter?

Insurance companies calculate your premium based on the risk profile of the regular driver. If anyone other than the regular driver operates the car frequently, the risk profile of insuring that vehicle changes, as there is likely to be different risk associated with that driver. An individual’s age, gender, licence duration and history are all factors that determine a risk profile. Any undisclosed material information means that the risk was unaccounted for and not factored into the premium. This could result in the insurer electing not to pay the claim, or they may only pay a portion of it, due to the vehicle not being properly insured.

What happens if a non-regular driver is involved in an accident?

If somebody with a valid driver’s licence uses the vehicle on a once-off basis or on an infrequent basis, and they are involved in an incident with your vehicle, you as the policyholder will be covered. This cover also includes any ‘drive-assist’ services that drive your car home on your behalf after a night out on the town. So, if you’re thinking of handing over your car keys, just make sure you understand the conditions of your policy and cover, and ask for clarification at the outset when taking out an insurance policy.