Insurance costs creating young driver safety hazard

Road safety charity, IAM is calling on insurance companies to overhaul their system for calculating premiums, after finding that the average 17 year old would receive a cheapest annual price quote of over £7,000. The charity even found a top quote of £9700.

Taking the profile of a fictional driver called ‘Tom Stevens’ with a birth date of March 3, 1994, the charity sought a quote for insurance. Assuming he had held his licence for one month and requesting insurance on a 2007 1.1 litre Kia Picanto, he received a quote of £7,091.38 for the very cheapest. Living in Richmond upon Thames and parking the vehicle on the road, the cover was just for ‘social use’ and yet still was unbelievably expensive.

Once Tom had been driving a year without conviction or penalty, the premium dropped to £2528.55. These outrageous insurance premiums are pricing young drivers off the road, IAM says, depriving them of valuable driving experience.

IAM director of policy and research Neil Greig said: “Young drivers can only learn safer driving by practising it, but huge insurance premiums risk pricing them off the road. The challenge for the government, the insurance industry and road safety experts is how to balance the need for experience with the very real risk that young drivers pose to themselves and other road users.

“When an insurance premium is matching university tuition fees, innovative thinking is needed to reward the safest young drivers or spread the cost in a more manageable way.”

He added that the price of insurance was making it more likely that young people will be tempted to break the law: “Many young people will need a car to get to work and there are serious implications to the economy of young people who are unable to afford to drive, and to road safety if drivers simply choose to forgo insurance.”

Author: Faye Sunderland, September 5th, 2011
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