Radio programme explores car insurance for young drivers

Car insurance for young drivers is an increasingly thorny issue in the motor cover marketplace as four-figure premiums seem to be becoming the norm.

Young motorists are increasingly seen as a major risk. I was listening in to a BBC Radio Four Moneybox programme the other day and thought I'd share with you some of the thoughts from a panel of insurance experts about young drivers car insurance.

Three parents called in about the high cost of cover for their offspring. One, a father, said he had added his daughter to his motor insurance policy for when she's back at home from university.

The father pointed out his daughter needs to be insured for just three months a year which is the relatively short length of time she is not at university - Easter, summer and Christmas.

The panel of experts pointed out that it might be appropriate to shop around for another policy that did not penalise him for adding younger drivers.

Gocompare.com's Hayley Parsons said, "You might find when you've changed your risk completely by adding your daughter on, you might have then become a risk that really they didn't want to insure and are charging you an excessive premium for."

Another expert recommended that the father talk over the matter with his broker to explain the situation and to ask to pay only the amount that needs to be paid.

The panel pointed out that it might be possible to add the daughter to the father's policy temporarily although they worried that this might lead to expensive administration charges each time changes were made.

Another parent, a mother, said she wanted to put a car in her own name but allow her son to drive it. The panel became very concerned at the suggestion.

Malcolm Tarling, spokesman for the Association of British Insurers, said such an action could be tantamount to fraud if the parent was not the main driver.

He warned that insurance companies need to know who reallyis the main driver. If the mother's son was only an occasional driver, that should be fine, he said - but failing to disclose to an insurance firm that the son is the main driver could lead to problems, especially if and when a claim is made.

The last parent who called in, a father, said his teenaged daughter received a car insurance quote for well over £1000. There was a query about why the figure was almost at the level of the car's value.

In fact, premiums can sometimes be higher than the value of a vehicle. The programme heard that the price of insurance reflected the fact that the cost of damages when drivers, young or old, are involved in an accident can run into many thousands, even millions, of pounds.

One panel member, Peter Staddon, from the British Insurance Brokers' Association suggested three ways for reducing quotes and premiums for young drivers:

  • Take a PassPlus test - Car insurance costs can be reduced by up to 30 per cent after taking this test.

  • Car insurance group - Drive a car that has a lower insurance group rating because the cost of cover will be reduced.

  • Stop driving at night - Obtaining car cover for daytime driving only can reduce the cost of premiums.

And that was a summary of the Moneybox programme. It covered some key consumer issues at the heart of the car insurance business currently - and it was quite refreshing to hear members of the insurance industry being put on the spot by members of the public who pay their wages.

Digg!

 

 

 

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