Young Driver Insurance Cap

tberry6686

The reason that insurance quotes for young drivers are so high is that insurance companies don't want young drivers as customers.

Put a cap on the amount insurers can charge young drivers will have the result of making it almost impossible for young drivers to get any insurance as insurance companies will just refuse to offer insurance to them as it will not be economical to do so.

vikingaero

tight_scotsman wrote: »

Evans Halshaw are doing free insurance on a peugot 107 vtr with free insurance incluing 19 yr olds.

anyone know how they manage this?

The scheme uses older people to average out younger risks. Plus 99.9% of free insurance schemes specify holding your licence for a minimum of 1 year.

pc1271

Does anyone know of a company which maybe runs a rebate scheme? One way could be to essentially charge a large "security deposit" or "excess in advance" which is returned at the end of a period (1 or maybe 3 years) if the driver remains claim free. Could be a way of rewarding the safer young drivers.

System

The flaw in that system is that most young drivers will not be able to conjure up a couple of £k in one lump sum to pay a large "security deposit" or "excess in advance"

worried_jim

xmodz wrote: »

Can people please sign this petition.

I'm 19 and getting charged £7000 insurance.

how I'm i meant to get a car when insurance is this high.


http://epetitions.direct.gov.uk/petitions/43265

Hi Daniel, I have signed for you. I had my first car in '91 and it cost me £500 to insure. For the next 4-5 years I always paid about £500 but I got more powerful cars. By the end of the 90's I was driving a 3.0 v6 turbo and the insurance was down to about £380. I now drive a Saab turbo and I pay £198 a year. It will get cheaper for you. Good luck with the petition and drive safely when you get the chance to! Good luck, Jim.

Gloomendoom

tberry6686 wrote: »

The reason that insurance quotes for young drivers are so high is that insurance companies don't want young drivers as customers.

Put a cap on the amount insurers can charge young drivers will have the result of making it almost impossible for young drivers to get any insurance as insurance companies will just refuse to offer insurance to them as it will not be economical to do so.

Then maybe some sort of government sponsored scheme would be a good idea. In some places, basic third party cover is included in the cost of the annual road tax. It means that as long as a car is taxed, it is insured, no matter who is driving it.

I sympathise with the OP. When I was 19 my insurance cost me £150 and covered any motor vehicle owned or driven by me.

andyrpsmith

My 19 year old son has just bought a ford C-Max Zetec diesel 2005 and managed to get fully comp for £2200 via go-compare.

dacouch

worried_jim wrote: »

Hi Daniel, I have signed for you. I had my first car in '91 and it cost me £500 to insure. For the next 4-5 years I always paid about £500 but I got more powerful cars. By the end of the 90's I was driving a 3.0 v6 turbo and the insurance was down to about £380. I now drive a Saab turbo and I pay £198 a year. It will get cheaper for you. Good luck with the petition and drive safely when you get the chance to! Good luck, Jim.

You paid so much less as the "Knock for Knock" agreement subsidised your premiums.


The system was an agreement between participating Insurers that if there clients had accidents they would not pursue each other to save money on admin with the idea being it would balance out over time. However a company such as Pegasus who only covered young drivers for TPO or TPF&T had a massive advantage as their clients had an accident with say Norwich Union whose customers were 95% comprehensive cover each company would pay their own costs and not pursue. So Pegasus's costs for own damage would be nil (As TPF&T) whereas NU would pay say £2k to repair their clients cars.

The Insurers who predominantly offered comprehensive cover eventually realised it was unfair on them and they were in effect subsidising low premiums for young drivers on TPF&T so the agreement was stopped.

No win no fee did not exist, personal injury claims were very rare, there was Credit Hire, less cars on the road and inflation obviously affects prices.

Also Insurers tend to pay more out in claims than they receive in premiums. They make their money by investing the money, interest rates in 1991 were circa 12% against their current rate of circa 1%. So the investment returns the Insurers are making are considerably less so they have to increase the premiums to make up the difference

dacouch

tberry6686 wrote: »

The reason that insurance quotes for young drivers are so high is that insurance companies don't want young drivers as customers.

Put a cap on the amount insurers can charge young drivers will have the result of making it almost impossible for young drivers to get any insurance as insurance companies will just refuse to offer insurance to them as it will not be economical to do so.

Is exactly what would happen if a cap was placed, all Insurers would withdraw from young drivers and fight it out for the safer older drivers.

Which would mean young drivers would not be able to get any cover.

The only way it could work if the value and frequency of young drivers claims are reduced. They're claims are massively more expensive than older drivers due to the speed of the accidents, way the car was driven and more importantly they tend to have lots of passengers. The passengers are normally young so when they have extensive injuries the injury costs are very high as the care costs are for longer and the loss of earnings are for longer.

tberry6686

Then maybe some sort of government sponsored scheme would be a good idea. In some places, basic third party cover is included in the cost of the annual road tax. It means that as long as a car is taxed, it is insured, no matter who is driving it.

Only problems with this are that :
1. It would be run by the government therefore hugely expensive and inefficient.
2. Europe would probably see it as some sort of subsidy to drivers and so it would have to cover the whole cost of the insurance and not run at a loss.
3. The government would want to make some extra cash off it.
4 Insurance companies often make very little off car insurance so how much would road tax have to be - I doubt if it would be cheaper than how it is today for most drivers.