Family car insurance: What is it, and how does it work?

Unfortunately, “family car insurance” doesn’t really exist as a product. There’s no policy that will automatically allow every member of your family to drive every car you own. 

However, there are various options, including multi-car insurance, named drivers and even specific policies such as learner driver insurance that can help fill the gap. 

To get your family on the road, you may need to tailor your existing car insurance policy to suit your new requirements or take out a more expansive policy at the point of renewal.

Just as every family is different, so too are the car insurance needs of each family unit. Below are some of the options you can consider to create your own family car insurance policy:

Multi-car insurance

If you search for family car insurance, the most common option you’ll find is multi-car insurance.

This type of policy allows you to insure multiple cars at once, and you’ll usually receive a discount for each additional car that you add to the policy. 

For most policies, all cars must be registered at the same address. However, you can find policies that’ll cover cars driven by family members who live elsewhere, such as a child at university. 

The main policyholder, i.e. the person who takes out the insurance, can add different policyholders for each car, reflecting the one who drives the vehicle the most. You can then also add named drivers to any of the cars. 

There are two main forms of multi-car insurance:

• One policy for multiple cars: you can choose to insure all your family’s eligible vehicles under a single policy with the same level of cover and renewal date. Typically, every named main driver will also still maintain their own no-claims bonus
• Linked policies for different cars: instead of having one policy that covers every car, you can link multiple individual car insurance policies together. This allows you to pick varying levels of cover, add-ons and excesses for each car. Each driver can build their own no-claims bonus, and the renewal dates are normally different 

Some providers may offer multi-car insurance that blends the features of those two options, such as a policy with a single renewal date but different levels of cover for each car.

You may want to consider multi-car insurance if your family has more than one vehicle and you want to benefit from the policy’s discounts while minimising paperwork. 

Multiple named drivers

If your family only has one car but you want more than one person to drive it, then you can add multiple named drivers to your vehicle. A named driver has the same level of cover as the main policyholder. 

However, a named driver cannot be the person who drives the car the most. This is a form of insurance fraud called “fronting”. 

A named driver doesn’t have to be a spouse or immediate family member. They don’t even need to live at the same address as you, meaning a child living elsewhere can still be added.

You can even be added as a named driver to one car while being the main driver on another vehicle without affecting your other policy. This can be useful if you and your partner have your own cars but want to be able to use each other’s vehicles.

If a named driver has an accident, it will be the main driver’s policy that’s claimed against and their no-claims bonus that’s affected. So you need to be 100 per cent sure you want to add a named driver before doing so. 

Some providers will specify a maximum number of named drivers, usually between three and four. And there may be age requirements for who can be added. 

Your premium will be affected if you add a named driver. In which direction, however, depends on who you add. If you’re an experienced driver adding a younger, less experienced named driver, then your premium may rise. But if you’re a newer driver adding someone with more experience, your premium may fall. 

Temporary car insurance

Sometimes a member of your family may need to borrow your car for such a short time that it doesn’t justify adding them as a named driver. In that instance, you can consider temporary car insurance. 

With temporary car insurance, a driver can be covered for as little as one hour but usually up to 30 days. It’s perfect if a family member needs to borrow your car to move house or go on a weekend away. 

And, best of all, your no-claims discount won’t be affected if the driver has an accident while driving with temporary cover. 

Learner driver insurance

If a member of your family is learning to drive, they can take out specific learner driver insurance.

This will allow them to take your car out for practice drives as long as they are supervised by a driver over the age of 25 who has held a full UK driving licence for at least three years. 

Most importantly, if they were to get into an accident while learning to drive, your no-claims bonus as the main driver of the car wouldn’t be affected.

Regardless of which route you choose to create your family car insurance, what’s included in your policy will depend on the level of cover you choose: 

• Third party: if you choose third party cover, you’ll only be covered for injuries and damage you cause to another person and their property

• Third party, fire and theft: if you opt for third party, fire and theft insurance, you’ll be covered for third party liability, car damage from a fire and car theft

• Comprehensive: with fully comprehensive insurance, you’ll be covered for everything in the previous levels, as well as accidental damage to your own car. Your cover may also include personal belongings, windscreens and glass, replacement keys and locks, damage from an uninsured driver, vandalism, medical expenses and a courtesy car

Are there any optional extras for family car insurance? 

Whether you’ve chosen a multi-car policy or added a named driver, there are several optional extras you can include with your family’s car insurance.

Common add-ons include motor legal protection, enhanced personal accident cover, extended key cover and breakdown cover.

For families, however, hire car cover may be the add-on most worth considering. This is because typical courtesy car cover will only apply if you’re in an accident and your vehicle is repairable, not if your car is stolen or written-off. And even then, you’ll only be supplied with a small hatchback as your replacement vehicle.

The right hire car cover will instead provide a temporary replacement regardless of the insured event and can offer a car that matches your own vehicle’s size.

So, for example, if you need a bigger vehicle to do the school run, hire car cover can give you the peace of mind that you’ll be able to get where you need to go even if something happens to your car.