Insurance for another driver's car: minimise risks, maximise protection
25.05.25
3
Minutes
Katrin Straub
Managing Director at nextsure
Your car, another driver – an incalculable risk or an insurable situation? Many vehicle owners underestimate the consequences when an undeclared person is behind the wheel and causes an accident. This article explains how to best protect yourself and others.
The topic in brief and concise terms
Expanding the circle of drivers can have a significant impact on the insurance premium; novice drivers often increase costs by more than 50 per cent, while partners can reduce them.
If an undeclared driver is driving and causes an accident, contractual penalties (often one year’s premium), additional premium charges and reductions in comprehensive insurance benefits may apply.
For occasional trips, many insurers offer temporary extensions; emergencies are often excluded, but the exact terms need to be clarified.
Understanding the basics: the driver group in your car insurance
The so-called driver group defines which persons are authorised to drive your insured vehicle. Insurers use this information for risk assessment, as statistically the accident risk varies with the number and type of drivers. Expanding the driver group, for example to include a new driver, can increase the premium by up to 54 per cent. The correct declaration of the driver group is a contractual obligation. Use not reported by other drivers can have far-reaching consequences. You should therefore be sure to know the exact definition and the impact on your premium to avoid unpleasant surprises.
Analysing financial risks associated with unreported drivers
If a driver not named in the policy causes an accident, motor third-party liability insurance will generally cover the other party’s damage. However, the insurer may impose contractual penalties, which often amount to a full annual premium. In addition, an additional premium may be charged for the entire period during which the driver could potentially have used the car. In the event of comprehensive insurance claims, the excess may increase to as much as EUR 2,500, or cover may even be refused altogether. These costs can quickly become life-threatening. An accident involving a driver not covered by the insurance should therefore be avoided at all costs. Awareness of these risks underlines the need to keep the list of permitted drivers up to date at all times.
Adjust the driver group correctly and optimise costs
Adjusting the list of drivers is usually straightforward. Inform your insurer by phone, email or via the customer portal. In most cases, you will need the additional driver’s name, date of birth and driving licence date. The costs vary considerably: including your partner on the policy can even reduce the premium by an average of four per cent. A young driver under 24, by contrast, can significantly increase the premium, as statistically they have a higher accident risk. Here is an example procedure:
Contact your insurer before the additional driver’s first trip.
Provide all required details of the new driver (usually date of birth, driving licence date).
Ask about the exact impact on your insurance premium.
Confirm the change in writing, if required.
Check whether a special rate for young drivers is more affordable.
Our expert tip: Ask about tariffs with partner discounts or check whether a short-term extension is sufficient for occasional trips. Taking a proactive approach helps avoid unexpected additional costs.
Check exceptions and special provisions for additional drivers
Not every use by another person has to lead to problems immediately. Many insurers allow occasional, free use by third parties without this having to be reported explicitly. However, the definition of "occasional" varies; often this is limited to a few times a year or a period of up to three weeks. In emergencies, for example if you are unable to drive yourself and a passenger drives you home, cover is generally also provided. Some policies also provide exceptions if the policyholder is in the car on journeys for support purposes (e.g. visits to the doctor). Always clarify the exact conditions for such exceptional cases with your insurer in advance. If anything is unclear regarding the registered keeper and policyholder, you should also seek advice. Knowing this helps ensure you do not unintentionally jeopardise your insurance cover.
Keep track of legal foundations and current rulings
The obligation to provide accurate information about the group of drivers arises, among other things, from the Insurance Contract Act (VVG), in particular Section 23 VVG regarding an increase in risk. [9,10] A deliberate false declaration can be regarded as a breach of duty. [1] Recent rulings repeatedly confirm that insurers are entitled to reduce benefits or demand contractual penalties in the event of breaches. [11,12] For example, the Dresden Higher Regional Court ruled that a driver in comprehensive insurance is not automatically regarded as an insured person. [11] The following points are legally relevant:
Notification obligation in the event of an increase in risk (e.g. a new, young driver).
Possible contractual penalties for false declarations (often one annual premium).
Risk of benefit reductions in a comprehensive insurance claim.
Additional premium claims.
Under certain circumstances, termination of the insurance contract by the insurer.
Our expert tip: Document any change/notification to your insurer in writing. This protects you in the event of a dispute and helps to handle the details of a change of policyholder correctly. A sound understanding of the legal framework is essential.
Cost trap for young drivers: Strategies for optimising premiums
Adding novice drivers to the list of drivers often leads to significant premium increases, sometimes by more than 50 per cent. This is due to the statistically higher accident risk of young drivers between 18 and 24 years of age. One way to reduce costs is accompanied driving from the age of 17; here, the surcharge can fall to around 28 per cent. Other driving experience, such as on a moped, can also have a positive effect. Compare offers carefully when a young driver is added. Sometimes a separate policy for novice drivers or using the car as the parents’ second vehicle is a worthwhile alternative. An annual review of the list of drivers and the premiums is recommended.
For occasional trips by third parties, many insurers offer a temporary extension of the named-driver cover, often for just a few euros per day or even free for a limited period. [4,5] This can be a sensible option for holiday trips or when friends borrow the car for a weekend. [2] Including a spouse or life partner in the cover is often possible at no extra cost or even with a premium saving of up to four per cent. [1,1] Here are some options:
Temporary extension of the named-driver cover (e.g. for one to 21 days). [5]
Adding the partner (often at no additional cost).
Checking special rates for family members.
Using some insurers’ apps for short-term registration. [3]
Our expert tip: Clarify in advance how often and for how long a free or low-cost temporary extension is possible per year. This makes it possible to make optimal use of insurance discounts and remain flexible. This ensures that other drivers are also well insured.
Your tailored protection with nextsure
The right cover when other people drive your car requires a careful assessment of your individual situation and your insurance policy. At nextsure, we focus on transparent advice and digital solutions to provide you with tailored cover. We help you define the group of authorised drivers optimally and avoid unnecessary costs or risks. With our expertise, we find a suitable solution for you that also takes into account the use of your vehicle by other drivers. So you can always travel with peace of mind, no matter who is behind the wheel. Use our digital platform to manage your policies with ease.
Request your individual risk analysis now: Have your insurance situation reviewed free of charge and receive specific recommendations for improvement.
More useful links
Wikipedia provides a comprehensive overview of motor vehicle liability insurance.
The consumer advice centre explains that motor vehicle insurance is mandatory for all vehicle owners.
Laws on the Internet contains the Compulsory Insurance Act (PflVG), which governs the legal basis for motor vehicle liability insurance.
FAQ
How often may another driver use my car without being declared?
Many insurers allow "occasional use" (e.g. a few times a year or for 1-3 weeks), but the exact definition varies greatly. You should definitely clarify this with your insurer. [2,5]
What penalties apply for driving with an unlisted driver?
Possible consequences include contractual penalties (often equivalent to an annual premium), retrospective payment of the higher premium, a higher excess in the comprehensive insurance claim, or even termination of the contract.
Is my child automatically covered as a new driver?
No, novice drivers must be explicitly declared in the driver group. This usually leads to a significant increase in the premium, often of over 50 per cent.
What does "restricted driver circle" mean?
A restricted driver group means that only certain, specifically named people or people with specific characteristics (e.g. minimum age) are permitted to drive the vehicle. This is usually cheaper than an open driver group. [2]
Can I temporarily extend the driver circle, e.g. for a holiday?
Yes, many insurers offer a temporary extension of the driver group, often for a small fee or even free of charge for a limited period (e.g. up to 21 days). [2,5]
What if someone else has to drive in an emergency?
In genuine emergencies (e.g. the driver suddenly falls ill), cover is generally provided, even if the driver is not listed. However, this should remain the exception.
