According to the one of the latest updates by the Money Saving Expert on young driver insurance, drivers under the age of 25 are paying an average annual premium of well over £1,000.
One of the keys to freedom and independence for young people is, of course, their access to their own transport, but with insurance costs so high many of them struggle to afford it.
Why so much?
Insurance is all about risk, and the fact is that insurers consider younger drivers a significantly greater risk than their more mature fellow motorists. That greater risk is demonstrated by:
- the increased likelihood of a younger driver being involved in an accident resulting in an insurance claim; and
- the average cost of that claim.
On the first score, the Association of British Insurers (ABI) estimates that although younger drivers form only 12% of the total driving population, they are involved in 25% of all fatal and serious traffic accidents. One in five of young drivers is going to be involved in at least some kind of traffic accident within just six months of passing their driving test, says the ABI.
On top of this increased likelihood of being involved in an accident, the average cost of youngsters’ motor claims is also much higher than for other age groups.
Reducing the cost
In short, younger drivers – probably more than any other age group – are interested in reducing the cost of their insurance. Fortunately, there are ways of doing just that:
- shopping around is always a sensible option, of course, but perhaps one of the safest bets is to do this amongst specialist insurance brokers – those with a particular interest in securing competitively priced young driver insurance;
- that is one of our missions here at GSI Insurance – a goal on which we put such importance that we have published an entire guide to motor insurance for younger drivers;
- if you want to reduce the risk that you are asking an insurer to cover, one of the conventional ways of doing so is to share more of those risks yourself – in the shape of a bigger excess;
- the compulsory excess which any insurer is likely to demand of the younger driver is already likely to be quite substantial, but you might consider the option of shouldering a further voluntary excess in return for cheaper premiums;
Level of cover
- an alternative way of reducing the amount an insurer might need to pay out in the event of an accident is to lower the level of cover you choose;
- if your car is an older model and unlikely to be so very costly to repair or replace, you might want to consider buying third party cover only, rather than fully comprehensive;
- it is worth keeping in mind, however, that a lower level of cover like this does not always guarantee a cheaper premium – so it is worth comparing prices very closely;
- there are a number of ways in which technology is currently helping younger drivers to reassure insurers that they are doing all that they can to lower the risk of an accident;
- so-called telematics – involving installation in the vehicle of a “black box” recording real time driving performance – gives just this opportunity;
- it allows younger drivers the ability to pay as they drive or pay when they drive – earning discounts on premiums for safer driving and for avoiding times of the day when accidents are more likely to occur.
Whilst you are establishing your credentials as a trustworthy, safe and reliable driver, you are almost certain to be faced with the high cost of young driver insurance – fortunately, there are ways of helping to lighten that burden.