Do you think car insurance is expensive for young people?

[Deleted User]

dannyrst wrote: »

No, don't cap insurance for younger drivers, because the price for the rest of us will go up to cover the losses.

100% correct, the insurance companies won't lose out so someone else will have to subsidise the young drivers and that will be us.

Driving is not a right as some seem to think, it has to be earned like everything else.

Any party or potential MP who promotes this ridiculous idea can be absolutely guaranteed that I wont vote for them.

AdrianC

You do not want car insurance at "cost price" (well, with a reasonable profit, else insurers simply won't touch it). Car insurance is very low-margin, because it's actually a very competitive sector, which is why so few insurance companies (as opposed to brands) are in it. Many others have decided it's simply not worth their while. I've renewed two policies already this year - both fully comprehensive - and am left with hange from £260 - for the pair...

The problem with young drivers* is simple. They* drive into things a lot. They* cost insurers a lot. If they* stopped doing that, they'd* find their* premiums would drop rapidly.

* = (as an actuarial group)

If you set a legal maximum premium, then all that will happen is young drivers will go onto a comparison site, and get a lot of refusals to quote.

Joe_Horner

One of the biggest problems for young drivers (and older ones in some cases) has been the absurd shift in prices of third party only cover. That used to be the standard expectation of young drivers - you got insurance that kept you legal but had to swallow the cost of your own damage. In a lot of cases that in itself was a good motivator to not drive into things.

Now they seem to classify third party policies as "high risk / otherwise uninsurable drivers only" and price them as such - often 2 or 3 times higher than comprehensive for exactly the same details. That's absurd when the risk in any given case (all other things being equal) is considerably lower for 3rd party cover.

Like with the "basic bank account" there should be a basic insurance policy which covers legal requirements only (not even fire or theft) and is open to young drivers with a good record, no matter how short it is.

If (as mentioned above) you kill your first car then you no longer qualify and have to face the cost of that. If you take your driving seriously then you benefit from minimal cost while gaining experience and NCD. It can't be beyond the wit of the financial industry to work out a system on that basis.

loskie

If insurance costs are capped then everyone else with lower premiums will be subsidising the ones that are capped.
It not about the cost of repairing the cars its the injury claims and repairs to road furniture and buildings that is the greatest cost along with the 20% of uninsured drivers.
Companies have to make a profit, they will charge whatever the risk demands.
Maybe driving test fees should be increased and that increase going into an insurance pot to subsidise young and new drivers.

AdrianC

Joe_Horner wrote: »

One of the biggest problems for young drivers (and older ones in some cases) has been the absurd shift in prices of third party only cover. That used to be the standard expectation of young drivers - you got insurance that kept you legal but had to swallow the cost of your own damage. In a lot of cases that in itself was a good motivator to not drive into things.

Bear in mind that the only difference between the two is the cost of repairing the policyholder's own car. This is usually the smallest element of any kind of non-trivial claim.

Joe_Horner

loskie wrote: »

If insurance costs are capped then everyone else with lower premiums will be subsidising the ones that are capped.

That's a weak argument.

With 30+ claim free years I'm already subsidising every single one of you who's claimed in that time. That's how insurance works - the ones who don't have accidents subsidise the ones who do.

There are only two ways to avoid subsidising someone else with motor insurance: self insure (if you can afford it) or make sure that you have enough accidents to get your (and someone else's) moneys worth.

Jackieboy

"Insurance companies are making it harder and harder for people aged 18-25 years of age to start driving."

And a good thing too in many cases!

Joe_Horner

AdrianC wrote: »

Bear in mind that the only difference between the two is the cost of repairing the policyholder's own car. This is usually the smallest element of any kind of non-trivial claim.

True, but a great many of those "new driver" accidents are either trivial or don't involve others. So it becomes a proportionately larger element in those cases.

Besides which, small element or not, the insurer is still taking on a reduced risk and (nowadays) charging more for it.

I sometimes check for 3rd party quotes when I renew because I'm never going to claim for my own vehicle anyway and - with all other risk factors identical - 3rd party generally comes out several hundred £ more than fully comp. That makes no sense whatsoever.

agrinnall

As Adrian says, if the premium is capped then insurers simply won't take on young drivers who would otherwise have been required to pay a higher premium. The end result being that they won't be able to drive at all as nobody will insure them, then when they get to 25 they'll be hit with the premium levels that they currently face at 18.

Lorian

Insurance for a learner driver can be obtained from about £56 per month to drive fully comp on a parents car while under supervision. But the day the test is passed this insurance terminates.

Then they try to insure a modest car (say Group 4E) and find they have to pay in the order of £2K to insure it to drive it.

Yes it's too much, and a £1.2K cap seems quite a sensible step forward to me.