2 August 2010 / Money, Motoring

Teenagers should get a better deal on car insurance

Comments 21

Who’d pay £17,000 for their car insurance? Few experienced drivers could cough that up, so why should teenagers? Insurers need to start developing solutions to help young drivers cut their costs.

The price of car insurance for young drivers has reached astronomical levels in recent years. It’s no wonder that around 1.5 million people now drive on our roads uninsured – most are under 25.

Last week there was uproar that a teenager had been quoted £17,000 for a year’s worth of cover on his Vauxhall Corsa. When faced with this kind of prohibitive pricing, it’s easy to see why so many teenagers feel it’s worth their while taking a chance and doing without insurance.

Teenage car insurance prices

In the end, as can be seen by this astronomical quote, uninsured driving is just a knock-on effect of insurers charging high premiums. If insurers really want to combat this then they need to come up with innovative solutions to help young drivers reduce their costs.

‘Fronting’ – the result of expensive car insurance

One increasingly worrying offshoot of this problem has been the rise of “fronting”. This is where parents take out insurance on behalf of their children and then add them to the policy as a named driver. This is entirely illegal if the child is in fact the main driver, yet it’s an offence that many families commit – as many as four in ten according to some reports.

The problem of rising premiums for young drivers is one that we all want fixed. Every driver in the UK pays around £30 on their policy to cover the cost of accidents caused by uninsured drivers. Only when motor insurance for young adults comes down will the levels of uninsured drivers fall as well.

Innovative solutions for cheaper car insurance

Fortunately, there are a few companies doing their best to help the cause – using innovation to bring down the costs. Companies like ikube and insurethebox put a tracking device in young drivers’ cars, granting them cheaper premiums if they don’t drive in the small hours, or drive too quickly. Another company, Young Marmalade, ties up car loans with cheaper car insurance for young drivers.

Even so, young drivers will be lucky to escape without paying annual premiums that run into four figures. There’s more work to be done.

Comments

Tom Gardner says:

2 August 2010

The £17k quote is not representative – just one exception from an insurer who didn’t want the business – I’d expect more sensible reporting from Which.
However if young drivers want cheaper car insurance then they’ve got to start driving safer – the premiums reflect the risk based on statistics.
The only other way young drivers will get cheaper car insurance is for the other more experienced drivers to subsidise them – and I definitely don’t want to have to pay any more – car insurance is expensive enough.
I’ve spent years driving carefully to build up a no claims, restricting my choice of car on occassion to reduce premiums.
The youngsters can demonstrate the same individual responsibility – their premiums will come down as they get more experienced and avoid crashes and convictions.
However we hear a lot about insurance fraud, and uninsured drivers which have to be paid for by the paying motorists – the industry and the law needs to crack down on this as at present the fine for being uninsured will likely be less than the cost of insurance making the offence appear worth the risk of getting caught which is by no means certain.
If fraud and uninsured driving were significantly reduced then the insurance industry overhead would go down, and so would everybody’s premiums – including the young drivers’.

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Rb says:

26 October 2011

Totally agree with this . i payed the high prices when i first started driving , and now i proved that i am safe on the road by building up a long period of accident free time i am entitled to cheaper car insurance ,the premium is a reflection of the risk and although it is guilty until proven innocent in a way would you be so quick to condone the insurance companys if it was your bank account covering the costs in the case of an accident? would you sleep easy at night? its just the way it is, and i too dont want to subsidise young persons car insurance premiums . if they cant afford it then thats life all they need to do is wait a few years . why does everyone think kids need to drive as soon as they pass their test anyway? , whats wrong with waiting a few years.

Peter Vaughan says:

2 August 2010

Young drivers are their own worst enemies. As insurance statistics prove, many of them are very high risk customers and the insurance companies are not benevolent societies. Why should careful drivers with long NCD’s suffer increased premiums because of the accident prone, often uninsured younger drivers? Just go into towns and cities at night and see the idiots, the cars filled with noisy teenagers out for a laugh and a danger to others on the road. If younger drivers want cheaper premiums, it has to be earned through careful driving over some years. Take the Pass Plus extra driving test, or even better, enrol with your local Institute of Advanced Motorists’ and get some advanced driver instruction (lessons are free .) Then when you are ready, get yourself examined by a professional advanced police instructor. If you pass, you will have a great record to offer an insurance company. You will be an ultra safe driver on the road and you will be able to get competitive quotes from the insurance companies.

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rip says:

22 October 2011

The Insurance industry seems to be an institution that rests its decisions on stereotyping groups of people and then treating them as guilty until proven innocent.

There needs to be a lot more imagination in relation to car insurance for young people. There is a need to balance a period of learning and supervision against the risks concerned. This is preferable to balancing the risks against an unreasonable financial burden from an industry whose primary motivation might be thought to be seeking higher profits rather than better safety.

The more training and skill, the less supervision and restrictions.

I have noticed a tendency for older people now to be focused on as a risk after years of being seen as the safest age group. Strange how the sands shift and the premiums keep rising.

Pete says:

2 August 2010

We all have to carry the burden of the unisured driver, but its now at such a level that I find it hard to accept. This should be an area for the Police Community and Traffic Offices to start a concerted effort to reduce, backed up by the courts with tougher actions and penalties against offenders.
The government has invested millions in speed cameras, which are so good??? that Oxfordshire is to remove them all. How about changing tack from being out to get every motorist, to getting the ones that really cause the problems for all. Its about time that insurance registrations and MOT registrations should be displayed along with your tax disc, if an the insurance companies and police can agree on a standard. Its not a solution on its own, and you would also need a way to show that hte car is insured and that the current driver is insured, how not sure, but its a start. It can then be a criminal offence for failiure to display.

So how does this affect the young and the insurance premiums, well not directly, but if the insurance companies, with the help from police, can lower the level of uninsured drivers by getting convictions and maybe forced to pay a retrospective payment penalty that has to be paid to the motor insuarnce bureau directly, whether they are still a car user or not, this could reduce the subsidy we all pay, and in turn lower premiums, enticing more people to get insurance in the first place.

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Peter Vaughan says:

3 August 2010

Very good comments. I raised the matter of displaying insurance proof in the car windscreen with a Senior Police Traffic Officer. We have all seen the evidence in France, for example. He told me that the police have an even better system of identifying uninsured, untaxed drivers (?)
Police cars are now equipped with technology which instantly reads number plates and tells them in a second which drivers are untaxed and uninsured. It would be great if we could all see more evidence of the police stopping and arresting / fining the drivers who could not care less.

Mother says:

2 August 2010

Whilst £17000 is a ridiculous figure, even for the smallest car an 18-year old male driver is looking at about £2000 annual premium, which is quite clearly unaffordable to young people and even their long-suffering parents. Yes, there are bad young drivers, and ALL need to gain experience of the roads, but don’t tar all with the same brush. Has anyone questioned whether those irresponsible drivers around town on a Saturday night are also irresponsible enough not to have insurance? My son has just passed his test and I can only afford to add him temporarily to my own policy, trusting that he won’t have any accidents (in any case the excess is about as much as the car is worth) and lose my no claims. Uninsured drivers need to be stopped, but how about reducing premiums for young/new drivers across the board – surely then more would choose to be insured, thereby putting more money into the ‘kitty’, and making savings on the admin that goes into catching uninsured drivers (policing, court costs, etc.).

richard says:

3 August 2010

This is yet another hype – Most insurance companies simply will not offer any insurance at all to a young driver if they think the risk is too high. I was quoted £1250 to insure MY DOG!

High insurance for young drivers has ALWAYS happened – It happened to me 50 years ago. Car worth £10 – Insurance £50 (Income £5 a week) – I paid it as I wanted to drive..

Now not only are repair costs much higher comparatively – BUT there are 1.25 million UNinsured drivers.- not all are young drivers – though ALL are criminals.

It is easy enough to stop this – the police have the data and the means to confirm an offence is committed – CRUSH the car – FINE the driver – Ban driver from driving – and put the criminal on an Insurance Offenders Register just like the sex offenders register. It won’t catch them all – but would make a huge dent in the numbers.

dave glinka says:

3 August 2010

Insurance companies should charge premiums which reflect the risks of providing cover. As teenagers are at greater risk of accidents their premiums should reflect this. People of all ages who are a greater risk from their driving record pay more. Why should teenagers pay less and others more to cover the total cost of claims?

Jane Winfield says:

5 August 2010

Young drivers should only be allowed to drive a car with no bigger engine size than 1000cc and fitted with a speed restrictor, and offered a realistic insurance which rises steeply if they cause an accident. Not all young male drivers are irresponsible on the roads and its not fair to punish them all with outlandish insurance premiums. If this was the case up to 21 years of age, before they can move onto a larger car size,it would help.

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Adam Sanders says:

6 August 2010

I’m not sure that restricting speed would really make much difference. The problem is that we don’t teach people how to drive. I think that between 6 and 18 months after passing the test there should be additional advanced instruction (and Pass Plus doesn’t count) and drivers should be taught to read the road ahead and to understand handling characteristics of a car.

Many accidents happen because they quite simply don’t have the experience to predict problems up ahead. Yes, if young males weren’t adrenalin junkies and enjoyed the thrill of speed and showing off to their friends things would be better, but let’s try and educate them rather than imposing more of the nanny state on them.

It’s amazing how putting some belief and trust in young people can make so much more of an impact than just telling them what to do all the time.

richard says:

6 August 2010

I wonder why teenagers don’t buy cheap cars and insure Third Party Fire and Theft Only to save money – It was always the way teenagers used to use to keep premiums low.

Three years accident free years earm a good no claims bonus – which can be transferred when you buy a newer better car.with higher premium. I did this when I tranferred fom motorcycle to car.

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corina says:

6 August 2010

I don’t think that teenagers should be forced to buy older cars, i feel that they are showing a great level of maturity by utiliasing thier money and learning to drive and buying a car.

yarrum says:

20 August 2010

Many insurance companies will allow a starter bonus of up to 30% of the gross premium if the young driver sits and passes ” Pass Plus” there is a fee for this but I know some Local Authorities subsidise this to assist in reducing accident figures. Our son did this 3 yrs ago and now has 60% NCD and his premium for Comp cover with £250 excess on a Honda Civic 1.6 (55 plate) is just over £600 with NFU Mutual.
Worth considering i would suggest

Raluca says:

18 February 2011

@Richard, Third party fire and theft is now even more expensive tham comprehensive one for most car insurance providers. They don’t really wanna sell third party so that’s why they put the price up some much. I guess the best thing before buying an insurance is to research a lot about what’s there in the market and what suits ur needs better. there’s one company , http://www.onlyyoungdrivers.co.uk for example that specialisez in insuring only young careful drivers and try to screen out boyracers and offer up to 40% discount.

Michael says:

22 April 2011

I’m a 20 year old male Mechanical Engineering student who also has 2 jobs and haven’t been able to drive for 2 years as i have been completely priced out of the market. I drove my parents 1.6 Astra for a year straight after i had passed my test as they could afford to put me on their insurance at the time. When i was driving I saw so many people on the roads who acted as if they were immortal (most of them being middle aged people in BMW’s) whilst i would never take any risks and never even came close to having an accident but yet it is I who has been tarred with the OH NO you’re a young male and must obviously be a suicidal maniac. If insurance companies lowered their prices more people would pay and they’d make more of a profit. They’re obviously too busy playing golf to realize this.

Rizzo says:

1 November 2011

A big chunk of the premium price nowaday is down to so many t****rs claiming whiplash for anything less than a serious accident so they can extract money they ‘feel like they deserve’ from the pockets of the general public AND insurance companies – (guess where insurance companies get their money from?)

A through medical checkover AT THE SCENE if possible of the claimant who is claiming whiplash:-

Was the head rest PROPERLY set for driver? Yes, fair enough, No, Tough luck, its your own fault.
Seatbelts used? – Yes ITS A LEGAL OBLIGATION, No, Fixed penalty and any personal injuries are self inflicted due to not making use of the vehicles safety restraints.

WE NEED TO END THIS STUPID COMPENSATION CULTURE, ITS PATHETIC AND LEGAL ROBBERY AS HOW CAN A SUM OF MONEY MEND A BROKEN LEG, OR DEATH OF SOMEONE OR EVEN BLINDNESS? WAKE UP PEOPLE!

TEEPEE says:

6 March 2012

Arent we all perfect. Its not just the kids that drive badly and uninsured. Not all kids should be tarred to the same brush as with most age groups you have hot heads of 18 and even still at 40 and then there the older drivers. So lets stop bashing each other and find real solutions that are afordable and then perhaps we would all be safer on the road.( I was hit by an uninsured driver of 45yrs coming at me on the wrong side of the road )

Jason says:

3 February 2013

Tried to see what it would cost to put Son on insurance . He won’t begoing on it as price increased by £3,000!!!!! Together with compulsory excess of £1,500!