Insurable interest / fronting

leviathan

I'm going to be lending a car to a friend for a short period ie: 2months.
The intention is for him to insure the car under his own name.

Personally I don't see a problem with that, however reading some threads in here suggests others do.

I will be the registered keeper.
I will be the legal owner.

I wont be on his insurance policy, I would probably drive the car via my 3PT cover from other vehicles.


Why?
It's a spare car which I bought back from a friend (different one, sold it to her last year) and may decide to keep. However at the moment it's on the driveway doing nothing and his car is being scrapped. Whilst he looks for another to replace it he will need transport.

That might sound like I'm a business it's not the case, tho trade insurance might have been a good idea it's not MSE sensible price wise for a year.

raskazz

leviathan wrote: »

I'm going to be lending a car to a friend for a short period ie: 2months.
The intention is for him to insure the car under his own name.

Personally I don't see a problem with that, however reading some threads in here suggests others do.

I will be the registered keeper.
I will be the legal owner.

I wont be on his insurance policy, I would probably drive the car via my 3PT cover from other vehicles.


Why?
It's a spare car which I bought back from a friend (different one, sold it to her last year) and may decide to keep. However at the moment it's on the driveway doing nothing and his car is being scrapped. Whilst he looks for another to replace it he will need transport.

That might sound like I'm a business it's not the case, tho trade insurance might have been a good idea it's not MSE sensible price wise for a year.

Won't work. The 'driving other cars' benefit does not cover cars that are owned by you or hired by you under a hire purchase/lease agreement.

leviathan

Fair enough on that score.
But being on the V5 doesn't mean I own the car just am responsible for it?
So if I sold it to him but retained the V5 registration...
(happy not to drive it for safety sake but pushing the technicality)

raskazz

leviathan wrote: »

Fair enough on that score.
But being on the V5 doesn't mean I own the car just am responsible for it?
So if I sold it to him but retained the V5 registration...
(happy not to drive it for safety sake but pushing the technicality)

An insurer would see through that easily. Furthermore you as the registered keeper would be sent any parking fines or letters concerning motoring convictions; and it is unlikely that your friend would have valid cover as he would not be the registered keeper of the car. Why would you want to retain the V5 anyway if you sold him the car?

Just sell it to him and transfer ownership, and let him insure it. Then buy it back when he's done with it. I don't see why this would be a problem.

rudekid48

Why don't you just insure it in your name, with your friend as a named driver (he can still be declared as the main driver), and get your friend to pay the premium for you? It would save a lot of hassle.

leviathan

raskazz wrote: »

Just sell it to him and transfer ownership, and let him insure it. Then buy it back when he's done with it. I don't see why this would be a problem.

Narrow minded buyers looking at number of former owners. It's happened before.

My daily driver has 15 previous owners IIRC. The last 5 before I bought it were using it for a couple of weeks then selling it to transport things about the country as they moved.
It's never something which has bothered me, but some people...


It's up for sale now anyway. His company wont insure it because it isn't modified and his policy is strictly thus.

Todddeman

Insurable interest is a principle of insurance meaning you have to 'Own what you insure or atleast have some sort of financial tie to the object' . Your friend satisfies neither of these.

Some companies offer short period insurance on additional vehicles on a policy and trying this would be my advice.

Steve1981

rudekid48 wrote: »

Why don't you just insure it in your name, with your friend as a named driver (he can still be declared as the main driver), and get your friend to pay the premium for you? It would save a lot of hassle.

i dont see that many companies will offer for a named driver as a main driver who is not a spouse or partner, its similar in effect to fronting

rudekid48

Steve1981 wrote: »

i dont see that many companies will offer for a named driver as a main driver who is not a spouse or partner, its similar in effect to fronting

Sorry, this is not fronting.... the main driver is being declared up front, and there are companies who will offer this.

Steve1981

rudekid48 wrote: »

Sorry, this is not fronting.... the main driver is being declared up front, and there are companies who will offer this.

as i said there are companies who will insure it, but not loads

the main point being whilst most policies are risk rated against drivers, many still take into consideration the policyholder as a rating factor not just highest risk driver.

therefore if by one person being named as a main driver on someone elses policy it 'could' still be considered a means of fronting if it gives a cheaper premium than in the name of the main driver.

this is the reason why many companies wont allow a policy to be set up where either policyholder or spouse/partner are maindriver or policyholder

leviathan

Todddeman wrote: »

Insurable interest is a principle of insurance meaning you have to 'Own what you insure or atleast have some sort of financial tie to the object' . Your friend satisfies neither of these.

Surely to protect himself from any debt he would incurr with respect to me if he were to damage the car gives him the insurable asset?
Isn't insurance about loss prevention in case of extrodinary circumstances?