Car insurance costs 'spiralling' for young drivers because of THESE reasons For a young driver, is one of the most expensive factors of owning a car Often the huge cost of insurance will surpass the actual value of the vehicle they are driving
One of the key reasons that car insurance costs are so high for young drivers is due to the evaluation of risk Risk factor greatly impacts how a premium cost is calculated Young driver pose a large risk for insurers as they have had less experience or time on the road so could be more susceptible to making mistakes Quarterly data released today by the UK’s leading price comparison website,, reveals that young drivers shouldered hefty car insurance premium increases from July to September 2017
The three factors that affected premium costs over this period of time, – the discount applied to claims pay-outs, the increase to insurance premium tax in June and fraudulent claims The discount (or ‘Ogden’) rate was changed in March, moving from 25 per cent to minus 075 per cent
Younger motorists are disproportionately affected by this beach it dramatically increased the amount an insurer would have to pay out if somebody was injured in an accident IPT leapt by 20 per cent in June, rising from 10 per cent of premiums to 12 per cent As younger drivers already pay the highest insurance costs across the whole motoring population, a percentage rise applied to their premiums will necessarily be the biggest Lastly fraudulent claims also impacted the cost of insurance for young drivers Fraud in the context of car insurance is usually due to fabricated or exaggerated claims on things such as whiplash
MoneySupermarket suggest that this added around £40 on to the cost of each policy Motorists (aged 17-19) on a fully comprehensive policy saw an increase of 6 per cent, from £1,32153 to £1,40500, while those on a third party (TP) policy saw an increase of 2 per cent, from £2,60656 to £2,664
56 Young drivers on a third party fire and theft (TPF&T) policy saw an even bigger increase of 7 per cent from £1,57166 to £1,68787 Insurers deliberately price TP and TPF&T policies higher than comprehensive ones because they know high-risk drivers would otherwise use them as a cheap route to getting covered
On the whole across the market, fully comp policies actually decrease by two per cnet from £562 to £551 Reforms to the Ogden rate have been proposed which could reduce policy costs for younger motorists by this change will unlikely take place until 2018 Kevin Pratt, consumer affairs expert at MoneySuperMarket, commented: “Young drivers are in despair about the spiralling cost of car insurance, with policies often costing more than the car they are driving “One potential money-saving option is to investigate ‘black box’ insurance, where insurers track driving behaviour via satellite and reward safer drivers with lower premiums “Everyone, regardless of age, should refuse to settle for the quote they get from their existing insurer, since firms usually reserve their best prices for new customers
“Those who haven’t changed insurer for a number of years are likely to find a much cheaper quote if they shop around at renewal”
