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  1. When they rate a policy, the insurer will ask questions about both the car, and the drivers. The car is what they would have to replace in the event of a loss, so they take in to account the group rating, (which is generally based on how safe and secure the car is, and what it’s performance is like), and the year of registration and value, (as that determines how much they would need to pay out if there was a claim).

    They also ask questions about the drivers. An experienced driver with a clean licence is generally a better risk than an inexperienced driver or someone with previous convictions or claims. They need to establish how much of a risk each driver is.

    So they are actually covering both the car and the drivers. The car is covered while unattended against theft and malicious damage and fire, and then when someone is driving it, the driver is covered against any damage he does.

    The policy holder is the person who has the contract with the insurer, and as such, whether he is driving, someone else is driving, or the car is unattended, he is the one who will decide whether to make a claim or not. In some cases, if it is a small amount of damage, he may choose to repair it himself rather than claim. There are measures he can take to reduce the number of claims, such as leaving it parked safely and securely when not in use, keeping it well maintained, making sure that it is driven carefully etc, so ultimately, the insurer is rewarding him for reducing the risk and not making claims by giving him a no claims discount. When the car is sold, the new owner has had no influence on whether the previous owner makes claims or not, so he does not qualify for the no claims bonus.