Many parents to hand down or purchase a vehicle for their child when he or she has passed their driver’s licence after turning 18. What a great prize for this important life event!
It is important for parents to understand that if the details on the insurance policy are not done correctly they could be in for a massive financial outlay if their child is involved in a vehicle accident.
While it is true that policies are more costly for these young adults due to the risk value of the inexperienced driver, is is imperative that they are detailed as being a driver of the vehicle being insured (full disclosure), regardless of in whose name the policy is in.
Failing to do this could give the insurance cause to argue misrepresentation of facts and it could mean a claim is rejected.
One way to ensure that the premium of an insurance policy for the young adult’s vehicle is as low as possible, is to refrain from selecting a high-performance vehicle as they will attract higher premiums. Another way to decrease the premium is to take on some of the risk by increasing the excess amount.
After a few years of driving, and even more so once these young adults turn 25, the risks decrease and the premiums can too. It is a good idea then to have the insurance policy updated.
In the unfortunate event of a vehicle accident, and the young adult is listed as the driver, the claims procedure will be dealt with in the same way as a policy for an adult. The more effort is placed on the details of the driver the fewer potential issue will arise out of a claim, and a better end result will be achieved.