Can I get car insurance under someone else’s name?
Want to get car insurance under your parents name? Need to insure a car that's not registered under your name? Find out if it's legal and what you should do.
It might be tempting to just insure your car in someone else's name who has more experience than you. But this is called car insurance fronting and is considered insurance fraud. There are other options though.
Can you insure a car that is not registered in your name in Australia?
Yes, but only if you are the primary driver of the vehicle.
For instance, you can get car insurance under your parents' name if you are simply an additional driver. If you're the main driver but you list someone else, this is car insurance fronting and it's technically insurance fraud. Plus, if you're involved in an accident and you need to file a claim, chances are your claim will be rejected or worse (getting convicted of fraud in NSW carries with it a maximum prison term of 10 years).
Generally, you can only get car insurance under a more experienced driver's name when that person is the primary driver of the vehicle.
Putting your name on your own car insurance policy isn't all doom and gloom though. The sooner your name is on one, the sooner you can start raking up time for a no-claims discount, which can save you heaps of cash in a few years.
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How to get car insurance under someone else's name (without committing fraud!)
Rather than getting an older or more experienced driver to take out a policy in their name and risking being caught for car insurance fronting, if they are the owner of the vehicle, you're better off getting listed on their policy as a nominated or occasional driver. Typically, it's fine as long as the main driver of the vehicle is the actual policyholder.
In other cases, if there's more than one main driver, then it might be worth getting a joint car insurance policy. This may or may not be cheaper than simply taking out your own car insurance.
Young drivers looking to get on their parent's car insurance policy
Generally, the main driver must be the person who drives the car the most so as long as that is a parent, you're generally fine. If your parent is the main driver of the insured car, and you're just an occasional driver, then you can generally just use your parent's insurance to drive it. If you're the only main driver, or the only driver at all, then you will generally need to take out your own car insurance, and can't get insured under your parent's name.
What happens if an unlisted driver has an accident?
This is worth knowing, because it might be able to help you save on car insurance, and because it’s relevant if you’ll be driving under your parent’s car insurance as one of the vehicle’s occasional drivers.
Depending on the policy, car insurance might:
- Fully cover anyone who drives that car
- Cover everyone, but incur an additional excess for anyone not nominated as a driver
- Only cover specifically nominated people to drive that car
Often you’ll be able to choose which of the three you want your car’s insurance policy to do, although the range of options available might vary between insurers.
If you don’t tick any boxes or make any decision, it might default to either option 1 or 2, in accordance with the policy’s terms.
As you can probably guess, option 1 often has higher premiums because it essentially gives free rein for anyone to drive the car, while option 2 is often somewhat cheaper. Option 3 is often the cheapest, but means anyone who’s not listed on the policy won’t be covered while driving the car.
If viable, you or your parents may want to restrict drivers, with option 3, to help lower car insurance premiums.
What happens if I’m the main driver, but get car insurance under my parent’s name?
Even if it does help you save on car insurance in the short term, car insurance fronting is typically not worth the risk. Either way you’ll still be paying for car insurance, so you might as well get cover that can work more reliably.
If you want cheap cover, you might be better off simply getting cheap and all-important third party property damage liability insurance. It might cost just as much as a fronted comprehensive policy, but could deliver a much more reliable level of the most important cover.
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