One
of the biggest problems young people who are starting to drive
face is getting car insurance. Before they even start their
engines, men and women aged 17 to 25 face an uphill struggle
to obtain cover for several reasons. Car insurance quotes
for young drivers are often difficult to get, with many insurance
companies not even wishing to provide a quote. Those that
do provide a quote often require a rate so high that many
young drivers find themselves paying more for insurance each
year than their actual car cost!
While it is true that the notoriety of so called ‘boy
racers’ has had an unfair effect on the insurance quotes
of the majority of young drivers who drive responsibly, there
are clear statistics to suggest that such high rates for those
in the 18-25 age group are justified. A teenage driver is
three times more likely to be killed in a traffic accident
than a driver aged 25-64, and is nine times more likely t
be at fault in a road accident than a 31-40 year old driver
with similar experience. Furthermore, if a young driver has
a passenger – probable given the relatively low ratio
of teenagers who can drive, thus giving lifts to their friends
– they are twice as likely to have an accident, increasing
to five times if there are two or more passengers.
While such statistics cannot be denied, it is not just so
called ‘irresponsibility’ that results in such
high insurance premiums. Lack of experience plays a part as
well. When you consider that two of the biggest challenges
a new driver can face – motorways and driving at night
– are not covered by the standard driving test, it is
evident that there is a major problem. When it is also considered
that young people aged 17-25 are socially active, often going
out in the evenings, or are at university, thus driving to
and from home along motorways on regular occasions, it becomes
clear that two of the biggest challenges a young driver can
face are also two that they would encounter most often, yet
are least prepared for. Subsequently, the above accident figures
are slightly more accountable, as are the high insurance premiums
companies subsequently quote. Fortunately, a test called Pass
Plus, taken after the basic driving exam, provides valuable
experience in both these areas, and can have an immediate
effect on insurance rates: some companies lower their quotes
by up to 35% if a driver has taken the Pass Plus exam.
Another problem that young drivers face in gaining insurance
is the type of car they drive. Because of their age, many
young drivers cannot afford a moderately new, reliable car,
so have to settle for an older, less environmentally clean
and less well maintained first car. This ironically leads
to them having to pay higher insurance premiums. An older,
less well maintained car may, for example, have a poorer than
average braking ability, leading to a higher accident frequency
and higher claims. To counter this, and the increased likelihood
of breakdowns due to poor reliability, the insurance companies
quote higher premiums for old cars. Conversely, those young
drivers that can afford a newer car need to be careful of
which model they select: a car with high performance or too
big an engine will worry insurance companies, with the ‘boy
racer’ image in mind, and will lead to a bigger premium
to counter the likelihood of accidents caused by aggressive
driving.
Insurance quotes are also affected by statistics that show
that young drivers not only have more accidents, but more
theft, fire and vandalism claims as well. While newer cars
are more reliable and have better security systems, perhaps
lowering the risks of the first two claims, there is little
that can be done to prevent vandalism. It relates to the next
major issue: location. The majority of young drivers in the
17-25 age group will be attending university, often a long
way from home. This may be one of the major reasons they have
a car; to make life easier getting between home and university.
Unfortunately, such distance between their term-time home
and where they come from originally may make motorway driving
a necessity, thus increasing the premiums they are quoted.
Furthermore, student housing in university towns are often
cheap accommodation in worse-off areas. This may have a direct
effect on the level of crime and vandalism in the area, thus
putting the driver’s car at increased risk. This is
something the insurers will take into account when calculating
a premium, so may significantly increase the quote for young
driver car insurance. Also, young drivers who are not attending
university may instead be entering a new job, many of which
provide a company car. It is important to check premiums for
specific cars, as too powerful an engine or too high value
a car may result in an excess to the quote, which may have
to be paid by the young driver themselves. This excess is
also due in part to the lack of experience of the driver,
as outlined below.
Another disadvantage in getting young driver car insurance
is that the majority of car insurance firms operate on a rolling
scale: the longer a driver goes without accident or claim,
the better their status as a driver becomes, leading to lower
quotes as time goes on. As young drivers have to start with
no experience, they effectively start at the bottom of the
ladder. It could be several years of careful driving before
a no claims bonus improves their standing and lowers their
rates. However, it is important to examine closely the options
different insurance companies provide. For example, some offer
a quicker track to no-claims bonuses than others, making it
slightly easier to lower premiums quicker.
In an effort to lower costs of insurance, many young drivers
opt to drive under third party cover, from their parents’
insurance. Though this may reduce the initial quote, there
are severe drawbacks. Many companies cover only an accident
caused by someone else, leaving out fire, theft, etc, and
driving with such cover often does not count towards a no-claims
bonus. Furthermore, third party with fire and theft cover
included may not be cheaper than fully comprehensive insurance,
depending on the company: it is important to get quotes from
several different companies, and carefully consider which
type of insurance is best for you.
Finally, and unavoidably, there is the problem of gender.
Young male drivers face a much harder job getting decent cover,
due in part to the ‘boy racer’ image, and the
fact that a naturally more aggressive driving approach results
in a higher claim rate: average losses for insurers are 120%,
making them a highly unattractive proposition to cover. Young
female drivers, however, are a much better insurance risk,
as their accidents are usually much smaller and less costly,
often involving minor knocks from parking rather than more
major accidents.
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UK
Car Insurance Select