It’s normal to try and help those we love, especially if they are going through a hard time. That’s why you might agree to let a friend use your car on the long term and act as a nominee for the car insurance contract. Assurances Multi-Risques would like to tell you more about this so that you can avoid insurance problems!



What do car insurers consider to be a nominee situation?

There are many situations in which a person will be considered as a nominee for insurance purposes: exes who help each other with the kids’ vehicles; a car owner, wishing to protect himself, who keeps the car’s registration to his name after selling it to a buyer who is unable pay off the car immediately; brothers and sisters or housemates who let the other one drive their car; people who put off or omit going to the licensing office to do the official paperwork in order to avoid paying fees and taxes. All such scenarios are considered to be a nominee situation, and insurers are reluctant to insure people who do this.



Why do insurers have cold feet when it comes to nominee car insurance?

Most insurers are hesitant to offer coverage because such situations might well hide a shaky financial situation that increases the claims risk. There is also a risk of conflict between the nominee and the benefactor that could complicate communications or collaboration with the insurer. Let’s take, for example, a person who is paying off his second-hand car through monthly installments to an owner who has not yet relinquished his registration and insurance papers. If an accident happens, the insurer will write a check to the official car owner. That means that the person who is in fact driving the car gets nothing since his or her name does not appear on the car’s insurance policy. You can certainly understand why no insurer is interested in dealing with such a delicate and potentially complicated situation! This, however, is only one of the reasons why insurers shy away from nominee situations.

Insurers also estimate that drivers who do not really own the car that they are driving are likely to be more negligent towards their vehicle. In case of an accident, it’s the real owner who will be dealing with the claims adjuster. What if the person who was in fact driving the car withholds important information from the owner and the insurer refuses to settle the claim because he considers that he is dealing with an increased risk? The car owner would then be facing a potentially serious financial loss as well as insurability issues in the future. Insurers obviously want to avoid such complications, and therefore refuse to insure car owners acting as nominees.



What if you need to insure a vehicle as a nominee?

Are you currently in a nominee situation and having trouble getting insurance coverage? Assurances Multi-Risques advises you against making a false declaration to your insurer because you risk having your claim turned down if you do such a thing, and finding out about your true situation is really quite easy for an insurer. Instead, we suggest that you to contact an independent insurance broker who specializes in cases such as yours, to thoroughly explain your situation and to make sure your broker clearly understands your current situation. Your broker will then find an insurer who will be willing to offer you coverage, thus helping you to avoid a nasty surprise in case you ever need to make a claim.