Young Driver Insurance - with Telematics - additional miles.

LittleRedYaris

Hi,
We have an isnurance policy for my sons little red yaris. He's now 18 and has a telematics device fitted.
When we got quotes, we estimated the mileage, and are not too far off, probably just under estimated the total by about 10% due to the novelty.

He's 3 months in and at 25% of his allowance.

The companty emailed us ealry on saying he could by extra miles now, just in case.
They have emailed again saying buy some more!

The miles you buy are NOT refundable. If you go over the allowance your policy is cancelled,

Now there must be a sweet spot between the driver ability and estimated miles/time left on the policy. (Like there is for renewals, 7 weeks I belive).
Enough data to map the drivers risk (ie gets lower as more driving is tracked), verses the mileage allowance getting used  up and needing to buy more.

With me so far?

So, there must be a swwet spot between the driver risk and the need for more miles. If you buy too soon you wont have enough driving data to get a decent discount and if you buy too late, they will load the premium as they know you need the extra.

Anyone have any experince of where that sweet spot is?

LittleRedYaris

excuse the spelling - so used to auto-correct I didnt even check my typing.... sorry!

tacpot12

It sounds like you are not far off if he has used 25% and is three months in. I don't know for sure, but I would suggest that if you think it has already been underestimated by 10%, you should look to buy that 10% now. (If the 10% underestimate relates to the whole year, you might only want to buy 8% for the remaining 9 months). You can review again in three months time.

LittleRedYaris

Thanks tacpot12.

I understand we will need to buy more, but the question is when (ie where's the sweet spot).
Too soon and they wont have enough driving data to reduce the premium down, too late and they have us over a barrell and will charge too much!
There is a tome inbetween the two points which is where you get maximum driver discount and maximum additional miles discount. Just wondering where that could be....

Clive_Woody

LittleRedYaris said:

Thanks tacpot12.

I understand we will need to buy more, but the question is when (ie where's the sweet spot).
Too soon and they wont have enough driving data to reduce the premium down, too late and they have us over a barrell and will charge too much!
There is a tome inbetween the two points which is where you get maximum driver discount and maximum additional miles discount. Just wondering where that could be....

I would assume that the extra miles will be billed at the same rate as the original contract, I'd be surprised if they offered a lower rate during the contract period based on whatever driving data they have so far.

LittleRedYaris

"Safer drivers save more with MyPolicy. So when your driver score goes up, you may be rewarded with bigger discounts on your renewal premiums and your mileage top-ups."

Lomast

I don't expect anyone but the insurer can answer that but I'm also skeptical about their claim, notice the word may in the bit you quoted

scrappy_returns

With Xmas or any holiday time coming up etc will there be a period of reduced driving that will nring it back in line with what was originally bought?

LittleRedYaris

Okay, some more digging/evidence.

In Sept we found a quote for £160 per 1000 miles, in Oct thats dropped to £140 per 1000 miles.

So there is a discount being applied to incentivise the purchase of more miles (as they are non-refundable).

This will discount curve will pivot at some point as there will be a great user need for these miles, and therefore the insurance broker can apply the reverse disc-curve (or premium).

We cannot be the only people to have thought about this, or have bought a policy like this. Its basic risk management.

I was hoping this would be seen by parents who had bought a similar policy, and be able to share the trend.

No point guessing, I can do that  

oh_really

Or run around less. Does the car have to be used at this rate or can it simply be used a little less?