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Rising Cost of Driving for Young Drivers May 12, 2008

Most insurers define young drivers as “anyone under the age of 30.”

Recently I have seen an increase in reports that premiums are being raised by as much as 50 to 60% at renewal time if there is a driver under the age of 25 as a named driver on the policy.

I’ve heard rumours around the industry that the government is behind some kind of initiative to make it more difficult to insure young drivers as additional drivers in some kind of attempt to make it harder for young drivers to get insured.

I can see why they think this will work but in reality I think yound drivers will find ways around this or continue to drive around un-insured which is not good news for anyone.

I’ll investigate this news and post my findings confirming or denying these rumours when I get more information.

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One Comments
joe.blogs May 13th, 2008

I’ve done a bit more research on this topic and found that its not a government initiative, instead its the insurers imposing stricter terms on brokers to reduce the amount of policy fronting.

Policy fronting is a term used by insurers to identify young drivers trying to get cheap insurance by being an additional frequent driver on a policy. Usually the mother or father of the young driver is the policy holder but is a casual or infrequent driver.

More insurers are rejecting this type of policy as they find the loss ratios are too high. The insurers who do accept fronting cases have worked out that there are less insurers to take this type of risk and have put their prices up.

This seems to be the cause behind the recent increased premiums offered to young drivers at renewal time.

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