Youngsters' Drive Car Insurance Premiums Up

Hard-pressed consumers reeling from the economic downturn in the UK will receive no respite from their car insurance providers as average premiums continued to rise in the third quarter of 2008. The AA British Insurance Premium Index, which acts as an industry benchmark, has revealed the average quoted premium on a comprehensive car insurance policy rose by 3.1 per cent over the last quarter - that’s the equivalent of a £22 rise. Over the course of the year this equates to an overall rise of £50 or 7.6 per cent, with average premiums now hitting £724.28. The shop-around index, which reflects the premiums buyers can receive by shopping around for quotes has also increased - buyers can now expect to pay £486 a year for comprehensive cover, an increase of £10 compared to three months ago.

Why are car insurance premiums rising?

According to the director of AA Insurance, most fingers can be pointed in the direction of young drivers, particularly men. The average car accident insurance claim for a young male driver is nearly £4,500 compared with £2,700 for their female peers. Indeed even though just 17 per cent of drivers are aged below 25, they account for around a third of all car insurance claims. This is reflected in the average premium quoted for third party, fire and theft cover - policies typically bought by young people with low-priced cars. Though the average reduced fractionally in the last quarter, there are fewer insurers willing to offer these policies and Allianz Insurance has recently withdrawn its product. Overall the premiums are rising with the shop-around index recording an increase of 1.2 per cent in the last quarter. It seems that while young drivers may be the cause of the problem, they are also the biggest victims too as premiums continue to peak. So what can be done to tackle the issue?

How can young drivers keep car insurance costs down?

Young drivers often pay the price for inexperience - as they are statistically involved in more accidents they are hit with higher premiums. So the first step youngsters should take is to ensure they receive suitable tuition and are thoroughly competent at driving by the time they take their test. Stick to the rules of the road, don’t speed and stay alert. Avoid driving recklessly such as tailgating a car in front, or driving under the influence of drugs or alcohol. By keeping their driving records claims and convictions free, youngsters can quickly reap the rewards. Most insurers offer no-claims discounts with some even offering rapid bonus schemes to new drivers allowing them to earn a full year’s bonus in just nine months. While attempting to improve your driving it’s also worth taking the Pass Plus driving course. This scheme, which runs immediately after you complete your driving test, provides six hours of tuition in more complex driving situations such as on the motorway, in the city and driving at night. Not only is this a great opportunity to continue learning, but many insurers reward drivers with discounts as a result - potentially as high as 35 per cent.

Perception is vital when attempting to reduce your risk level in the eyes of an insurer. Driving a high performance car with a number of modifications such as alloy wheels, an enhanced exhaust and hydraulics will quickly drive up your premiums as it pervades a ‘boy racer’ image. However, if you drive a small car with a low performance engine and no modifications your premiums could fall significantly.

Security of vehicles is another major factor when assessing car insurance premiums among youngsters particularly as they often live in high-crime student areas. By parking your vehicle in a garage overnight, fitting a suitable car alarm and immobilizer and installing wheel nut locks you can slash your premiums. Get in touch with your insurer to ask which alarm system it recommends and can offer a discount on before proceeding.

If you are a student think about how regularly you use your vehicle. Chances are you may live on campus and don’t need to travel large distances. If you rarely use the car during term time and only keep it for holidays, then inform your insurer - you may be able to agree on a mileage limit which will reduce your costs.

The key for young people however, is to shop around. Compare car insurance online and gather as many quotes as you can find before applying for a policy. While it can be tempting to only apply for the cheapest deal remember to examine the terms and conditions and the level of cover before agreeing on a quote.

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