Posts tagged young driver
The European ban on using gender to rate insurance premiums is bad news for younger female drivers, with rises of up to 50 per cent for some car insurance policies widely expected.
A 2004 EU directive allowing insurers to use gender to rate premiums if they were backed by statistical evidence was successfully challenged last year, leading to this week’s decision to scrap the exemption.
That statistical evidence certainly exists, with young men twice as likely to claim on their insurance policy than young women, while they are 10 times more likely to have a road accident involving serious injury, which is where the most costly claims occur.
But the courts have decided that equality cuts both ways, and from December 21 next year, gender cannot be used as a risk factor.
It takes away one of the fundamental principles of insurance, and there have to be fears that there will be more challenges in the future based on other discriminatory risk factors, such as age.
With gender stripped out, it’s likely that premiums for female drivers will increase to match those of male drivers, which won’t drop because of the difficulties most insurers are having making money on men.
Some, if not most, insurers will look at ways of discounting which will catch as many women as possible by using proxies such as occupations.
It means the odd male secretary or nursery assistant will end up with cheap insurance but, as 95 per cent of these positions are filled by women, then insurers can continue to attract female customers and can prove that they’re not rating based on gender.
The big losers will be those women working in traditionally male-dominated occupations, or where the gender/occupation split is 50/50.
There are, of course, ways of reducing insurance premiums, some more hi-tech than others.
The most obvious involve the basics, like getting a PassPlus or Institute of Advanced Motoring qualification, keeping your car garaged if you can and installing the best alarm system you can afford.
Members of owners clubs can get discounts of up to 15 per cent on some schemes, while limiting the mileage to a few thousand miles a year will also reduce the premium.
More and more fleets are now using telematic devices that measure the mileage, but also the driving styles, such as braking, accelerating and speed, in real time.
This benefits the fleet managers in terms of improving efficiency and reducing accidents, which in turn often leads to discounts on fleet insurance.
There have been “black box” insurance schemes on private cars for some time, but some of them place heavy restrictions, such as curfews, on drivers, and have therefore had limited appeal.
However, with the way premiums have increased in recent years for young drivers, these devices are likely to be seen more and more.
They are unlikely to be compulsory for some time yet, but we may reach the point that most young drivers have them because it will be so much cheaper in the long run.
Using the technology, good drivers can be rewarded with things like extra mileage allowances or larger discounts.
Your choice of car will also play a major part, so we’ve put together this list of the top 10 insurance friendly cars for young drivers:
Volkswagen Beetle (old shape, up to 1600cc)
Peugeot 107 1.0
Vauxhall Corsa 1000cc
Peugeot 106 1000cc
Fiat Panda 1000cc
Austin Mini 1000cc
Fiat Uno 1000cc
Peugeot 205 950cc
Renault 5 1000cc
Citroen 2CV 602cc
We’ve mentioned this before, but a recent article in the Independent on Sunday has nicely highlighted how the practice of getting insurance under a parent’s (or other relative’s) name, known in our industry as ‘fronting’ could leave you severely out of pocket.
Representatives from Zurich, More Than (Royal Sun Alliance’s consumer brand) and Norwich Union (currently being rebranded to Aviva) were wheeled out warning that fronting is a bad idea for all concerned.
Keith Lewis from Zurich said:
“Not only can it lead to a claim being refused but also both the young person and their parents can be charged with insurance fraud.”
wheras moreth>n’s Keith Maxwell adds
“One of the first things we check when a claim comes in is whether there has been any fronting. It’s not a wise move.”
So what can young drivers do about bringing down the cost of car insurance. The distinguished panel share some tips:
“The quickest way to cut this is by building up a no-claims bonus [in your own name], which can ultimately reduce premiums by half to two-thirds.” Keith Maxwell (morethan)
“This is the passport to cheaper premiums. It’s best to bite the bullet and start building it up as quickly as possible,” adds Erik Nelson (NU)
Agreed. It’s worth pointing out that although you will pay more in the short term, if you steer clear of too many claims, you will save money in the long run – especially when it is time to leave the family home.
“Look at taking the Pass Plus driving course. This advanced qualification can bring discounts of 10 per cent on premiums.” Erik Nelson (NU)
The Passplus course will save you money, but NU seem to be a bit stingy here. Some of our schemes offer a discount of up to 40% for Pass Plus qualified drivers.
“We offer a rapid bonus scheme. Basically, you insure the car in a block of nine months, at the end of which you are credited with a full year’s no-claims bonus,” Erik Nelson (NU)
What Mr Nelson doesn’t mention, is that these “Bonus Accelerator” policies, also touted by Admiral/Elephant, often have a few drawbacks. Frequently they charge you a higher monthly fee for 10 months than you would pay on a twelve monthly basis. Secondly, this undermines the basis of No Claims discount somewhat, and, as a result, some companies are reluctant to accept bonus from these accelerator policies. Companies, which have, in the past included such well known names as .. er.. Norwich Union! Quote from the thread linked above
“It seems a bit confusing as I got a quote from Norwich Union with 1 years NCB for £327 but when I spoke to them on the phone and tolod them it was a 10 month BAP, they said they didn’t recognise it and could only quote me over £500.”
Norwich Union have clearly changed their mind since then.
- More Than and Norwich Union, have both run “Black Box” powered Pay as You Drive schemes, although, as Mr Nelson explains, Norwich Union have had to cancel these.
“We had hoped … that the car manufacturers would start offering the GPS boxes as standard. Ultimately, the expense meant we had to call a pause.”
Another thing we’ve been saying for a while, is that these schemes are using technology for its own sake – drivers who don’t drive as far can benefit from discounts on a limited mileage policy without having to submit to curfews or corporate snooping.
“Go for a smaller car in a low insurance group. And consider if you should go with third party, fire and theft cover rather than fully comprehensive, and whether you need the car for commuting or just leisure driving.” Keith Lewis, Zurich
This is all very sensible stuff. If your car is low value (let’s face it, most people start off with a banger) TPFT is the most sensible level of cover. We made a list of the ten cheapest cars for young drivers, but there are others that fit the common theme – low engine capacity, small cars with ready availability of cheap parts.
“Younger drivers will have an excess imposed, but by agreeing to a slightly larger one, the premiums can be cut.” Keith Maxwell (Morethan)
Very true. A voluntary excess can reduce the premium, but be careful not to raise it too high, as if you have an accident you may have to fork out the amount of your excess before you can get back on the road.
- Join an owners club or online forum. This can bring you a discount of up to 15% on a policy, easily covering any membership fees with the insurance saving.
- Take extra security precautions to reap an extra discount. So fit the best alarm you can, and try and persuade your dad to let you keep your car in the garage.
- Can’t find a PassPlus near you? Well there are plenty about, but perhaps you might find a more convenient venue doing the IAM or Max Driver courses. Don’t worry – we do discounts for those as well.
- Be wary of comparison sites. As you’ve seen above, some companies will try and foist a 10 month ‘accelerator’ policy. Another advantage to the companies pushing these is that it gives them an unfair advantage on aggregator sites if everyone else is offering 12 month policies – remember they are offering around 17% less cover. It is always best to include a specialist broker or two when it comes to ringing around. You will usually find that you end up paying less over the phone than you do online – despite what you might think.
So, some good tips, and some iffy ones from the major insurers, but I have a few more young driver car insurance tips that might help out:
To speak to a specialist now, you can call us on 08000 83 88 33.
I was glad we were able to help a young client with a problem. Insurance for young drivers is difficult to find at the best of times, but if you are a nineteen year old young driver, a bloke, live in London, and you need to insure a vehicle that is not only electrically powered, but is also q-plated and a milk float, there are very few insurers willing to offer cover.
Thankfully, because we have such a large panel of insurers, our commercial vehicles insurance department was able to help out a young man in exactly that situation, who had been looking, without any luck, for someone who could cover his 1987 milk float. And whilst the rate was never going to be particularly cheap, it was a good price for the situation, and he’s now got the coolest ride in London.
And if you need milk float insurance, give us a call on 08000 83 88 33.
The film initially looks like it might be a rather naughty romp in a car, but gradually reveals a very serious anti-drink drive message that really merits the 2.5 million views it already has on Youtube. Don’t watch it if you’re easily distressed.
Another prong of Direct Line’s assault on the aggregator websites was a claim that there was no information on policy features and add-ons provided by the price comparison sites, and that often the prices are cheap because the policy is very basic.
On the face of it, this seems like a reasonable point, but some of the aggregators do allow you to compare other features of the policy and there are other reasons that we shouldn’t accept this argument on face value.
Lets take a look at some of the “great” policy features that Direct Line brag about to their potential customers:
- Named drivers earn their own no-claims discount: This, along with the advert used to illustrate it, seems to me to be a tacit admission that many of Direct Line’s policies are what are called fronted risks. This is insurance jargon for insuring your car in the name of your parents, or another elder relative, and most insurers consider this a form of fraud and some will decline to pay out if they establish that a named driver is actually the main user of a vehicle if this has not been clearly stated at the time the policy was taken out. Adrian Flux will usually decline to offer a quote on anything that looks like this situation, but that’s not to say you can’t get a discount for driving experience you have built up while covered on someone else’s policy – if this is your situation, ring us on 08000 838833.
- Match your no claims bonus on a second car plus 10% discount for second cars: As specialist insurers with lots of classic cars, kit cars, cherished cars and show cars on our books, many of the cars we cover are second cars, or even third, fourth or 38th cars. As a result we’ve been offering matched No Claims Discounts for years, and that applies to standard cars as well. In fact if you have more than a couple of cars we can offer multi car insurance or a family fleet policy. And our discounts for second third and fourth cars can rack up to substantially more than 10%, because we know that you can’t drive everything at once.
- Keep your no claims when you are hit by an uninsured driver: Sounds great doesn’t it, but there are a few catches here. First off you need to give Direct Line the registration number of the offending vehicle. No good at all for those numpties who hit your parked car while you’re shopping nor if the criminals (which is what uninsured drivers are, after all) speed off without giving you a chance to eyeball their plates. They’d also like you to collect the uninsured driver’s details “if possible”. You could just get a protected no claims policy which would protect your no claims discount, whatever the cause of your claim. Most companies now offer this feature for a small additional premium.
That of course is the point. All of these features come at a cost, and the customer has to pay for these features.
With a specialist car insurance broker, like Adrian Flux, you can ask for policy features that match your needs and we will do our very best to find a company with a policy that offers what you need. You may pay a little extra for the additional benefit, but most people would agree that that’s only fair.
But if you’re with Direct Line, you are paying for the provision of those named driver benefits and uninsured claim NCB protection whether you want them or not – through a higher premium. And what’s more, you may find yourself with a restricted choice at renewal time, as virtually no other insurer will decide to accept their named driver no-claims discount (that is the case at the time of writing anyway)
As I said earlier in the post, we would be able to offer an introductory discount for driving experience as a named driver, but younger drivers may well, in years to come wish that they had just got insurance in their own name with their own NCD.
And while we’re on the subject of policy features, most customers these days have grown used to the fact that most comprehensive policies now include a courtesy car while yours is off the road as a standard feature. Direct Line don’t.
Nor do they include free legal cover.
I haven’t heard them mention that in their ads, though.
Updated June 2012 with latest prices
There’s no getting away from it. Car insurance for 17 year olds is expensive. The simple fact is, the youngest drivers on our roads are, on the whole more dangerous, owing to their understandable lack of experience behind the wheel.
But if you are a young driver, there are things you can do to help yourself. First off, do an advanced driving course, like PassPlus, Btec level II, IAM, RoSPA or Max Driver. By getting extra skills and experience, you’ll be making yourself a safer driver and young drivers will save much more than the cost of the course on their first insurance premium.
Second, take a limited mileage policy if you can commit to driving less than, say 1500, 3,000 or 5,000 miles a year. This will save you money, and is a more convenient way of getting a discount than installing a “Pay as You Drive” black box into your car, where some insurers will discount for a limited mileage but can stop you driving at particular times of the day!!
Joining an owners club can drop your premium by up to 15%, parking your car in the garage will probably save you more than your dad, and fitting an alarm will bring down the premium too. Also adding a parent onto the policy will further reduce your premium.
So far, so good, but there are some factors you can’t, or are unlikely to change. You can’t make yourself any older, and you probably don’t want to move house just to get cheaper car insurance. So that leaves the car that you choose as the main factor in determining the price you will pay.
So what is the cheapest car to insure. We did some research and the result may surprise you.
The cheapest car to insure, for a teenage driver, is, by a country mile, the classic VW Beetle. Other classics have also done well, with the Ford Anglia coming in 3rd and the Citroen 2CV6 coming 4th, but it’s not just a list of bangers with respectable modern motors like the Vauxhall Corsa, Peugeot 106 and the quirky Vauxhall Agila all doing very well.
Of course, not all classic beetles are all that old – production continued in Mexico and Brazil right up to 2003, and some enthusiasts import these to the UK enjoying the classic Beetle styling and air-cooled power, with a few (slightly) more modern creature comforts. Check out mexibugs, for more details.
Here is the list of cars, you’ll notice that almost all of them are low powered 1 litre engines – if you go for a more powerful car too soon, your premium will accelerate faster than your car, for example, if that Renault 5 at number nine were the turbo version, the premium for a bloke would be £4,000, so watch out. All the quotes below are for Third Party Fire & Theft Cover for a 17 year old driver living in a moderate-to-low risk area in a white collar occupation and assume the car is valued at less than £5,000.
|Car model / engine size||Male||Female|
|Volkswagen Beetle (old shape, up to 1600cc)||1450||1000|
|Ford Anglia 1000cc||1890||850|
|Vauxhall Agila 1000c||1980||1500|
|Vauxhall Corsa 1000c||1980||1500|
|Hyundai Amica 1000c||2030||1530|
|Hyundai Atoz 1000c||2030||1530|
|Fiat 126 0652cc||2030||950|
|Austi Mini 1000cc||2150||1150|
|Citroen C1 1000cc||2170||1200|
|Renault Clio 1149cc||2220||1630|
|Daewoo Matiz 1000cc||2200||1680|
|Peugeot 106 1000cc||2250||1700|
|Fiat uno 1000cc||2250||1500|
|Fiat Panda 1000cc||2250||1700|
|Volkswagen Fox 1200cc||2280||1290|
|Suzuki Alto 1000cc||2350||1770|
|Volkswagen Lupo 1000cc||2350||1550|
|Seat Ibiza 1000cc||2350||1680|
|Daihatsu Cuore 1000cc||2600||1640|
|Toyota Aygo 1000cc||2600||1120|