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Admiral launches ‘car sharing insurance’: how does it stack up?

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Written by: Paloma Kubiak
02/02/2017
As the cost of running a car seems to be on the up, Admiral has launched a new insurance product aimed at those who only want to use a motor for a short period of time. Is it any good?

In a move to tap into the burgeoning ‘sharing economy’, Admiral has launched a car sharing insurance product for anyone aged 18+ who wants to borrow a car from one hour to up to 30 days.

The insurance-on-demand is aimed at the car borrower, rather than the car owner, and one of the main requisites is that the two individuals must know each other, such as a father and son.

Admiral said that as people can get cover for a car owned by a friend, colleague or family member, it hopes the driver will do their best to be careful.

The insurance provided is fully comprehensive and in the case of an accident, the car owner’s no claims discount won’t be affected. Separately, the car borrower is also able to build up their own no claims bonus via the scheme.

One hour’s insurance costs £5, which Admiral said is cheaper than similar cover offered by competitor Cuvva at £8.57. For 24 hours it’s £20 from Admiral, while it’s £33.38 from Cuvva and £36.37 from Dayinsure.

However the excess is £750, which Admiral said is owing to the product being new as well as to reduce the risk of fraud. Admiral explained: “If an excess is too low, an owner may have an interest in having a very high excess on their main 12 month policy (so for a cheap price) and then buy CSI for one hour or one day (for £5 to £20) for a relative just so that they could claim on CSI and get the benefit from a low excess.”

The Admiral insurance is a not-for-profit vehicle sharing scheme, which makes it different from peer-to-peer car rental platforms such as EasyCar Club and HiyaCar as these sites allow car owners to lend their motors to anyone, with both owner and borrower being covered under a separate insurance policy.

Is it cheaper than adding someone to an existing insurance policy?

Car owners may be able to add family or friends to existing car insurance policies but the price you’ll pay will vary. Admiral said that based on its own research, no other insurer allows another driver to be added for less than a day which means if someone needed only to borrow the car for a couple of hours, they would have to pay for the full day.

Furthermore any claim made by an added driver would affect the owner’s no claims bonus which could impact the price at renewal. However, it’s best to compare prices and speak to your insurer first to ensure you get the best price.

‘On-demand insurance is a nifty solution’

Kevin Pratt, consumer affairs expert at comparison site MoneySuperMarket, said this short-term flexible policy is very welcome as it’s a cost-effective way to get insurance cover without committing to the cost of an annual policy, or the costs of owning a car.

“Younger people who have yet to start a family and who live in an urban area where parking is scarce often don’t need a car for everyday use, and would find it an expensive headache to maintain one. So being able to dip in and out with on-demand insurance is a nifty solution.

“Key to the success of these policies is that, if you borrow a car and have an accident, the owner’s no claims discount won’t be affected, and they’ll be given a courtesy car while their vehicle is off the road. That means parents, for example, don’t need to feel so anxious when handing over the keys to a son or daughter keen for a weekend away with their mates.

“A crucial thing to watch out for with these policies is the excess – the amount you must pay towards the cost of any claim you make. All car insurance carries an excess, which is made up of a mandatory part imposed by the insurer, and a voluntary part set by the policyholder. These usually total £250 or £300, but with a short term policy you could be paying double this, or even more, as a mandatory excess.”

Pratt said as well as looking out for the excess, it’s worth keeping tabs on the costs of all the cover bought in case it may be better value to add a child to a parent’s policy for instance.

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