Is The Price Of Car Insurance Unfair To Young Drivers?

The cost of car insurance is rising every year, with young drivers being hit particularly hard. While average car insurance premiums in the UK are now over £1,000, 17-22 year old drivers can expect to pay about £2,792, while drivers that live in Manchester and Merseyside can expect peak premiums of about £5,394, or £5,330 in London.

As a result of these high costs more and more young drivers are taking out a guarantor loan. In this context, younger drivers consistently suffer as the result of insurance premiums. Why is this the case, and are there any other options for young drivers that want a better deal on their car insurance?

Young drivers tend to suffer compared to other drivers as a result of their age and insurance companies’ belief that they are at a much higher risk of suffering accidents. This isn’t necessarily as the result of age, but can be down to the fact of driving inexperience. Drivers in their first few years behind the wheel are not as attentive to road dangers, and may take more unnecessary risks.

An inexperienced driver may be more likely to be involved in an accident where another driver is not at fault. Young male drivers are particularly hard hit by insurance company valuations, which is dependent on accident statistics, and by the amount of claims made every year.

Young males are associated with late night driving, and are also viewed as being at a higher risk for speeding, and as taking more chances on corners. These drivers are sometimes categorised as being under high risk of drink driving and racing friends. The buying of old cars and modifications that push engines to dangerous speeds represent additional factors here for boosting risk.

Although a recent European court ruling means that insurance companies can no longer discriminate on their premiums in terms of gender, it’s unlikely that young drivers will change as a high risk market. From an insurance company’s perspective, the logic behind high premiums is sound – young drivers make more claims, and cost them more money in the long run.

Not every young driver, however, is a dangerous driver, and many suffer as the result of generalisations. Older drivers also suffer by extension through general premium rises to meet new claims. What options are available, then, for young drivers? One of the more recent strategies for lowering premiums is to set up as a pay as you drive insurance policy.

A GPS device, or black box, is installed in a car, which monitors driving performance and creates a record that an insurance company can use to assess overall safety on the road. These devices can often result in lower premiums.

Drivers that are considered a high risk can similarly improve their premiums by demonstrating a commitment to locking their cars in a garage overnight, and by investing in extra security features like engine immobilisation.

Alternatively, a young driver that lives at home with their parents can be included on a multi-car insurance policy that offers lower than average premiums as a reward for going with the same provider, while still providing individual no claims discounts and excesses.

Author Bio: Liam Ohm writes about finance. He enjoys passing on his advice to others that are in need of help.

 

 

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Tags: Financial services, GPS, Insurance, London, Vehicle insurance

Category: Insurance