Why premiums are higher for younger drivers
On average they pay much higher premiums than their elders, but there are several reasons for this, such as:
- Lack of experience – many day-to-day reactions to potentially dangerous situations are instinctive, and this can only come with practice
- An excess of adrenaline – a lot of youngsters find driving exhilarating and tend to take too many risks
- Living in a high risk postcode – a trend towards higher education means that a large proportion of young people now go to colleges and universities in big cities, which attract higher premiums than more rural areas
- Unsociable hours driving – some of them stay up too late at night. Night time driving, particularly at weekends, carries a higher risk of accidents
- Drinking – sadly many of them over estimate their capacity for handling alcohol
- Showing off – they are far more likely to try to impress others, particularly members of the opposite sex, with their driving skills than older and more confident people
- Older cars – statistically, people under 25 are more likely to drive an older vehicle than their parents do. The more modern a car is, the more safety features it is likely to have
- Lack of car maintenance – many of them simply cannot afford to keep their vehicles in tiptop condition
- Overconfidence – a faith in one's own abilities can be an asset sometimes, but can also lead to potential risk taking.
You could slash your insurance costs in this way – but only if you are, genuinely, an additional driver, and not the main driver. If you actually drive the car more than the other person – who should also be the registered owner of the vehicle – this could be considered fraudulent. Fraud is a criminal offence and could be grounds for an insurance company refusing to pay out on a claim.
Whilst you could save a great deal of money on your car insurance premium, bear in mind that since this is someone else's policy you are unlikely to build up any no claims bonus even if you have a good claims free record. Conversely, if you are involved in an accident or other type of claim the car owner's NCB could be affected as well, which would not make you very popular.
Some insurers will allow a worthwhile discount if they see that a more experienced driver is also involved with your vehicle. You would be able to be the registered owner, and you would probably accumulate no claims discount rights after an accident free record. Again, this will have to be a genuine arrangement, with the other person driving the car from time to time.
The problem with being a young driver is that you will be classed alongside all other young drivers, the majority of whom are a poorer risk for insurance companies. If you are, however, a careful driver, having a Telematic policy may pay dividends. Your driving would be constantly checked; and the insurance company would probably be kept aware of not only how well you drove and observed speed limits, but also of which roads you went on, for how long, and at what time of day. Subject to the criteria laid down by your insurer you could receive a discount on future policies, or even a partial refund of an existing premium, if you are judged to be a good risk.
Records show that because the policyholder's driving is being constantly monitored, the accident rate for young drivers with this type of policy is lowered considerably. Since this reduces death, injury or damage to property, any reduction in traffic incidents can only be a good thing.
There are drawbacks to these telematic policies, however
(a) If you are found to brake or accelerate too hard, take corners too quickly, exceed speed limits or generally drive in an unsafe manner you could find your premiums increasing dramatically, or even have cover withdrawn. If this happened you would have to inform any future insurer of the fact, and you could expect an increased premium at best, or even a refusal to cover you at all at worst.
(b) Some insurers place limits on the time of day that you are allowed to drive. Evenings and weekends are the peak periods for accidents, and, depending upon your policy details, you may find yourself forbidden from driving at these times.
(c) An initial premium for a Telematic policy will probably reflect the fact that the blackbox, and the fitting charge, have to be paid for. If you decide in the future is to switch to another insurer you could well have another charge to have the box removed.