News: Drivers set to lose second car cover

News: Drivers set to lose second car cover

Millions of UK motorists will no longer be insured to drive another car on their existing policy by the end of the year, even if they have paid for "fully comprehensive" cover.

Traditionally, a feature of virtually every comprehensive motor insurance policy on the market is "driving other cars (DOC), which provides policyholders with third party cover when driving any other vehicle with the owner's permission.

But Norwich Union, RAC and Asda are all phasing out DOC cover because they claim it is being abused by consumers and stands in the way of a government clampdown on uninsured drivers.

Royal & Sun Alliance, More Th>n, Cornhill Direct and Axa are also carefully considering the move and admit they may be looking to follow suit in the near future.

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Craig Martin, product manager for motor at Norwich Union, says: "The cover was initially intended for emergencies only but policyholders are using it as an alternative to getting cover on a second, more powerful vehicle."

Currently motorists can insure themselves on a Ford Fiesta but drive around in a Lamborghini. If they are pulled over by police and asked to produce insurance documents then they can claim it was an emergency because policy certificates rarely specify what constitutes an emergency. Cover is on a third-party basis only and the borrowed car has to be insured by the owner.

The market is divided, though, with insurers such as Admiral, Churchill and Sainsbury's refusing to cancel the cover because they claim it will lead to thousands of motorists driving around unaware they are no longer insured.

The push to remove DOC cover has the support of the police and was initially recommended by the Greenaway Report last year which outlined ways to clamp down on uninsured drivers.

According to the Motor Insurer's Bureau (MIB), 5% of all UK motorists are uninsured, compared with just 0.2% in Germany and Sweden. This is estimated to add an extra £30 to every annual motor premium.

Ashton West, group chief executive of the MIB, says: "Uninsured drivers cost law-abiding motorists money and that is not fair. We support Norwich Union's moves to take away DOC cover because it is widely abused and impedes police efforts to deal with those who don't play by the rules."

The government this year introduced measures giving police greater powers to track down and punish uninsured drivers. Insurers are required by law to forward details of all their policyholders to a central motor insurance database. And, from October, police will use automatic number plate recognition on police cameras to cross-check whether a car is insured.

Uninsured vehicles can be seized and crushed. Direct Line, for example, is working with Durham police which has crushed more than 800 cars so far this year. A spokesperson for More Th>n says: "The 'driving other cars' extension of cover essentially undermines the effectiveness of the motor insurance database as a reliable tool for the authorities."

Direct Line and Tesco's, though, will not be following the government's lead because they claim it would be too difficult to communicate changes to policyholders.

A spokeswoman for Direct Line says: "The problem is that the cover is used quite a lot by policyholders and customers have come to expect it. Unless the industry tells motorists that this cover no longer exists motorists will unwittingly be driving uninsured thus increasing the problem."

The organisation Which? - formerly the Consumers' Association - has also expressed concern. A spokesman says: "Insurers must drum into their policyholders that they are no longer covered. If they fail to do so the consequences could be terrible."

Motorists are advised to contact their insurer when taking out or renewing a policy to find out what exactly they are covered for. With so little to choose from between insurers in terms of price, benefits like DOC cover could well prove crucial in the battle for your business.

Will your insurer continue to allow you to drive other cars?

Admiral Yes

Asda No1

AXA Under review

Churchill Yes

Cornhill Direct Under review

Direct Line Yes

Groupama Yes

Norwich Union Direct No1

Morth>n Under review

RAC No1

Royal & Sun Alliance Under review

Royal Bank of Scotland Yes

Sainsbury's Yes

Tesco Yes

1 = Fully removed from policies by end of year

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