Car insurance in parent's name a good idea?
Imagine this: you just got your driver's license, you buy a car and then want to get car insurance.
When you take out the insurance, you see that the cost is quite high per month. Some people therefore choose to put the car insurance in the name of their parents. This is because the insurance may then become cheaper. Will the insurance actually become cheaper and is it wise to do this?
Why is insurance in parents' names attractive?
Getting insured under your parents' policy is primarily more cost-effective. Insurers viewyoung adults aged 18 to 25 as a higher risk. According to insurers, young people around that age are more likely to cause accidents than experienced drivers. As a result, they also pay a higher premium.Another reason is that young people have no, or fewer,claim-free years. By building up claim-free years, you receive a discount on yourcar insurance. Both arguments could be a reason to put car insurance in your parents’ name, but what are the consequences of this?
Are there any consequences if I insure in my parents' name?
There can be several consequences when a person puts car insurance in the parents' name. When applying for insurance, the insurance company asks for the license plate holder and the regular driver(s) of the car. These must agree match. So if you actually drive the car all the time, but the parents are specified as the regular driver, this does not match. A regular driver is the person who uses the car the most. So when you borrow the car from your parents, word you are not directly considered a regular driver. If you actually use the car all the time and your parents (almost) never drive it, you are a regular driver. If the insurance is not in your name, but in the name of your parents, it is insurance fraud. It is mandatory to put the insurance in the name of the person who uses the car regularly.
What is a CIS registration?
If the insurance company discovers that the car insurance is in the parents’ name rather than the name of the person driving the car, the insurance company may cancel the policy. The car will then no longer be insured. In addition, the insurance company may issue a fine if it is determined that the regular driver and the policyholder are not the same person. Furthermore, the insurance company may report you to Stichting CIS. Stichting CISstands for Stichting Centraal Informatie Systeem (Central Information System Foundation). Insurance companies can consult CIS to obtain, store, and exchange information about their customers.
When you apply for insurance or file a claim, the insurer may check with CIS. What the insurer does with this information varies by case and company. Typically, if youare registeredwithCIS, you will not be accepted by a standard insurance company.
Building up claim-free years is possible?
In addition, this can also have negative consequences for your ownno-claims history. If the car insurance is in your parents’ name, you won’t build up your own no-claims history. As a result, you won’t be eligible for a discount on your car insurance.
Can you get car insurance for a child?
Is it convenient to put car insurance in your parents' name? It can save money, but it can also cost a lot of money when the insurance company figures out that there is insurance fraud. Also, you don't build up your own claim-free years. So it is wise to put the car insurance in your own name. That way, you build up your own claim-free years and do not run the risk of a CIS registration.
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