Every parent of a teenager who has passed his or her driving test
and is lucky enough to be able to afford his own motor vehicle will be
painfully aware of the immense cost of insuring that vehicle, even to
the minimum liability requirement prescribed by the law. It is not
merely anecdotal that many young drivers find that the insurance
quotations that they receive for one year of cover, either through a
broker, on the telephone or via one of the numerous online insurance
price comparison websites, is more expensive than the vehicle that they
wish to insure! There are obvious cost implications for the parent in
this situation but before we consider how the premiums might be
minimised, we will look briefly at the reason for this overloading of
motor insurance premiums for young drivers.
Essentially, insurance companies are businesses. The bottom line of every business is to make a profit, so that it can pay can pay a dividend to its shareholders and/or invest that profit in some other money making venture. Accordingly, insurers are extremely cautious about setting their premiums at a level that might jeopardise their profit by virtue of increasing the amounts that they are required to pay out in respect of a claim. In order to calculate the amount of the premiums that they quote, therefore, insurance companies take into account the statistical likelihood of a particular driving group to be involved in an accident and, if they are involved in the accident, the likely extent of the damage and, in turn the likely size of the payout that they will have to make.
The statistical evidence is quite damning. Firstly, one out of every five drivers is involved in some form of motor accident during the first year of driving. Inevitably, the vast majority of these drivers will be a young driver. Secondly, there is a ten times greater likelihood that a male driver under the age of twenty-one will be involved in a motor accident that a male who is over the age of thirty-five. Thirdly, the preponderance of motor collisions involving young drivers occur after nightfall. There are only one in eight drivers in Britain who are under the age of twenty-five, yet one in four of the drivers who are fatally injured in a car accident come from this age group.
Finally, approximately 40% of motor car passengers who will suffer fatal or critical life threatening or life altering injuries will have been in a car that was driven by a young driver. It is important to add a rider to these statistics. Whilst they refer to young drivers generically, in fact young female drivers are significantly less likely to be involved in a motor accident that their male counterparts and, if they are involved in a collision, the consequences are likely to be less severe. It should also be added that the cost of the claims that are settled arising from accidents caused by "boy racers" are spread through the entire driving community - meaning that we all are paying higher premiums as a result.
So, the insurance companies justifiably charging a substantial premium to insure young drivers, what can be done to seek to keep the costs down as much as is possible?
The first and arguably the most effective way in terms of reducing not only the young driver's premiums but also the likelihood of his being involved in a crash is if he completes the Pass Plus course conducted by the Driving Standard Agency. In this course, the young driver gains additional experience in driving in and out of town, in different weather, at night, on dual carriageways and on motorways. Completion of the course can drastically reduce the initial premium. Additional ways of reducing the premium are to keep the car in a locked garage, or at the very least, off-road during the night, have an effective immobiliser fitted to guard against theft, ensure that the young drivers avoids falling into the trap of buying a car which is considered to be high risk and therefore in a higher insurance class and, as important as any of the above, make sure that there are no alterations made to the vehicle, such as the addition of spoilers, which might alter an insurer or as broker that they have a potential boy racer on their hands.
All the above measures will serve to minimise the initial insurance premium. Thereafter, it is in the hands of the young driver. If he gets through a year without any claims, he will receive his no claims discount for the second year's premiums. As this will be a percentage reduction, it is likely to involve a substantial saving, which will be repeated, so long as he remains accident free, until the full no-claims discount has been reached.
Although, it is clear that the premiums for young drivers will remain high, unless driving habits change beyond recognition, it is hoped that this article explains why this is the case and what steps can be taken to obtain the lowest possible premiums. When all that has been done, compare the insurance prices that are available, to further maximise your money saving.
Essentially, insurance companies are businesses. The bottom line of every business is to make a profit, so that it can pay can pay a dividend to its shareholders and/or invest that profit in some other money making venture. Accordingly, insurers are extremely cautious about setting their premiums at a level that might jeopardise their profit by virtue of increasing the amounts that they are required to pay out in respect of a claim. In order to calculate the amount of the premiums that they quote, therefore, insurance companies take into account the statistical likelihood of a particular driving group to be involved in an accident and, if they are involved in the accident, the likely extent of the damage and, in turn the likely size of the payout that they will have to make.
The statistical evidence is quite damning. Firstly, one out of every five drivers is involved in some form of motor accident during the first year of driving. Inevitably, the vast majority of these drivers will be a young driver. Secondly, there is a ten times greater likelihood that a male driver under the age of twenty-one will be involved in a motor accident that a male who is over the age of thirty-five. Thirdly, the preponderance of motor collisions involving young drivers occur after nightfall. There are only one in eight drivers in Britain who are under the age of twenty-five, yet one in four of the drivers who are fatally injured in a car accident come from this age group.
Finally, approximately 40% of motor car passengers who will suffer fatal or critical life threatening or life altering injuries will have been in a car that was driven by a young driver. It is important to add a rider to these statistics. Whilst they refer to young drivers generically, in fact young female drivers are significantly less likely to be involved in a motor accident that their male counterparts and, if they are involved in a collision, the consequences are likely to be less severe. It should also be added that the cost of the claims that are settled arising from accidents caused by "boy racers" are spread through the entire driving community - meaning that we all are paying higher premiums as a result.
So, the insurance companies justifiably charging a substantial premium to insure young drivers, what can be done to seek to keep the costs down as much as is possible?
The first and arguably the most effective way in terms of reducing not only the young driver's premiums but also the likelihood of his being involved in a crash is if he completes the Pass Plus course conducted by the Driving Standard Agency. In this course, the young driver gains additional experience in driving in and out of town, in different weather, at night, on dual carriageways and on motorways. Completion of the course can drastically reduce the initial premium. Additional ways of reducing the premium are to keep the car in a locked garage, or at the very least, off-road during the night, have an effective immobiliser fitted to guard against theft, ensure that the young drivers avoids falling into the trap of buying a car which is considered to be high risk and therefore in a higher insurance class and, as important as any of the above, make sure that there are no alterations made to the vehicle, such as the addition of spoilers, which might alter an insurer or as broker that they have a potential boy racer on their hands.
All the above measures will serve to minimise the initial insurance premium. Thereafter, it is in the hands of the young driver. If he gets through a year without any claims, he will receive his no claims discount for the second year's premiums. As this will be a percentage reduction, it is likely to involve a substantial saving, which will be repeated, so long as he remains accident free, until the full no-claims discount has been reached.
Although, it is clear that the premiums for young drivers will remain high, unless driving habits change beyond recognition, it is hoped that this article explains why this is the case and what steps can be taken to obtain the lowest possible premiums. When all that has been done, compare the insurance prices that are available, to further maximise your money saving.
Author: Billy Phillips. Look at the Best Insurance Comparison Sites on his website Best Price Comparison Website
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