Insurance Companies Helping to Cut the Cost for Young Drivers
The Office of Fair Trading (OFT) announced in May this year that the Competition Commission would be studying the car insurance market which the OFT views as dysfunctional. Whatever the findings, it seems likely that those subject to the highest premium in the UK insurance market are not likely to benefit hugely. Young driver’s car insurance is well known for being high and, as it reaches record levels, young women face the added bad news that they will soon, if they are not already, join young male drivers on the Britain’s “Most Expensive to Insure” charts. However, the Association of British Insurers (ABI) have welcomed the investigation by the OFT, which has in part been prompted by reports that rogue companies may have colluded with garages to supply courtesy cars at inflated prices. The insurance industry is not only keen to cut down on fraudulent claims but is actively trying to reduce premiums for all drivers and particularly for young drivers.
Self-help and Insurer Options
With fuel prices and road tax being additional burdens for any driver, for young drivers the focus on cutting the cost of insurance has to be a priority. There is no magic wand solution to the issue and many of the tried and tested ways of reducing your premium still hold true. In addition there is at least one method that your insurer may be able to offer which will help to cut those costs. Methods to cut your insurance include:
- High powered cars are considered a greater risk in their own right and choosing a high powered model as a young driver will put you in the high premium bracket. Consider an older, lower powered car, which will attract better insurance quotes.
- Adding yourself to a family car as a named driver will in many cases result in an affordable premium. However, this must be done honestly to avoid more serious problems. If you are actually insuring your own car and just using a family member on the policy, you’ll face the charge of “fronting” if you are caught. In the event of a claim you probably will be caught out and this can result not only in penalties or prosecution for fraud, but may mean you will not be covered on the insurance and then be refused for future policies.
- Two other traditional methods include quoting lower mileages and higher excess amounts on your application. Again, be honest with the mileage, or if you go over your initial quote, contact your insurer to let them know. The excess is the amount you will pay if you make a claim, so be sure you’re realistic about what you would be able to afford.
- The insurance industry is keen to reduce the premiums for young drivers. The high premiums actually reflect the cost of pay-outs for this age group. Accidents involving younger drivers have involved massive pay-outs in recent years, because of their serious nature. However, the one size fits all approach is one that the insurers are well aware is unrealistic. In an effort to cut the cost of young driver’s insurance they have introduced telemetrics to the market. This involves having a box fitted to your car which then assesses your driving ability, offering feedback to you and sending the results to the insurance company. By basing your premium on your safety and driving skills the insurers can, in most cases, offer radically lower premiums to the vast majority of (safe) young drivers.
As in most areas of life, it is the minority that has created an almost impossible situation for young drivers when it comes to insurance. With a few simple self-help steps and a little assistance from the insurance companies, it is still possible to reduce not only the risk of being involved in an accident in your first years of driving, but also cut the cost of your young driver car insurance policy.
Young driver’s car insurance has always been high, but in recent years has become beyond the reach of some drivers. Combining sensible measures when applying for insurance with innovations available from some insurers can help to radically reduce the costs of car insurance.