While the fuel duty reduction announced in the Budget may have brought some relief to young drivers, for many the cost of motoring remains unaffordable due to steep insurance premiums.
Motorists in their teens or early twenties pay substantially higher premiums than older drivers because they are considered higher risk by insurers. According to the Driving Standards Agency, in the UK, an 18-year-old driver is more than three times as likely to be involved in a crash as a 48-year-old.
But now The Co-operative Insurance has become the latest insurer to launch a policy specifically for young drivers, which promises lower premiums if the policyholder can demonstrate that they are responsible on the roads.
Here, we look at how the policy works and whether it could be right for you…
What’s the deal?
The new Young Driver policy calculates premiums based on driving behaviours and rewards those who demonstrate they drive safely with lower premiums. According to The Co-operative Insurance, the new product, which is designed for 17 to 25-year olds, will be on average £328 cheaper than competitor prices. It claims that over three quarters of young drivers could make a saving with this policy.
The insurer is able to monitor a driver’s behaviour by fitting a Smartbox into the owner’s car. Using satellite technology, the box then relays information on braking and acceleration, cornering, speed, and the time of driving – so whether most journeys are made during the day or at night time.
Driving is assessed every 90 days based on these four driving behaviours. If the motorist drives well, then they will receive a Safer Driving Discount that cuts the cost of the annual premium by up to 11%.
However, if the box shows bad driving behaviour, for example, repeatedly breaking the speed limit or taking corners too sharply, then their premium could increase by 15% of the initial policy price.
Motorists can log into a unique online ‘Driving Dashboard’ to see how their driving has been rated against the four driving behaviours. It also gives advice on what they can do to improve. Each behaviour is illustrated by a speed dial and drivers will be rated on a green (good driving), amber (generally good but showing some bad behaviours) and red (bad driving).
Any catches?
If you aren’t able to demonstrate that you can drive responsibly, then your premiums under this policy could end up being higher than if you opted for a conventional policy that doesn’t monitor your behaviour.
Your insurance will be cancelled if you drive so far above the speed limit that a driving ban is imposed.
Verdict
Young drivers who believe they pay higher premiums due to others’ bad driving may well benefit from a policy which rewards good driving behaviour.
Any innovation in the insurance market that can help reduce steep costs for young drivers should be welcomed, especially if it encourages safer driving.
Aviva used to offer a similar policy, but it was withdrawn several years ago because the technology involved cost more then and premiums for young drivers weren’t as steep as they are now.
Top tip
Remember that there are plenty of other ways young drivers can reduce insurance costs. Taking additional qualifications such as ‘Pass Plus’ can reduce premiums, and you could also consider adding an older, more experienced driver to the policy as a named driver to keep costs down.
Don’t, however, be tempted to ask an older driver to register themselves as the main driver – this is illegal and likely to result in any claim being rejected.
Motorists in their teens or early twenties pay substantially higher premiums than older drivers because they are considered higher risk by insurers. According to the Driving Standards Agency, in the UK, an 18-year-old driver is more than three times as likely to be involved in a crash as a 48-year-old.
But now The Co-operative Insurance has become the latest insurer to launch a policy specifically for young drivers, which promises lower premiums if the policyholder can demonstrate that they are responsible on the roads.
Here, we look at how the policy works and whether it could be right for you…
What’s the deal?
The new Young Driver policy calculates premiums based on driving behaviours and rewards those who demonstrate they drive safely with lower premiums. According to The Co-operative Insurance, the new product, which is designed for 17 to 25-year olds, will be on average £328 cheaper than competitor prices. It claims that over three quarters of young drivers could make a saving with this policy.
The insurer is able to monitor a driver’s behaviour by fitting a Smartbox into the owner’s car. Using satellite technology, the box then relays information on braking and acceleration, cornering, speed, and the time of driving – so whether most journeys are made during the day or at night time.
Driving is assessed every 90 days based on these four driving behaviours. If the motorist drives well, then they will receive a Safer Driving Discount that cuts the cost of the annual premium by up to 11%.
However, if the box shows bad driving behaviour, for example, repeatedly breaking the speed limit or taking corners too sharply, then their premium could increase by 15% of the initial policy price.
Motorists can log into a unique online ‘Driving Dashboard’ to see how their driving has been rated against the four driving behaviours. It also gives advice on what they can do to improve. Each behaviour is illustrated by a speed dial and drivers will be rated on a green (good driving), amber (generally good but showing some bad behaviours) and red (bad driving).
Any catches?
If you aren’t able to demonstrate that you can drive responsibly, then your premiums under this policy could end up being higher than if you opted for a conventional policy that doesn’t monitor your behaviour.
Your insurance will be cancelled if you drive so far above the speed limit that a driving ban is imposed.
Verdict
Young drivers who believe they pay higher premiums due to others’ bad driving may well benefit from a policy which rewards good driving behaviour.
Any innovation in the insurance market that can help reduce steep costs for young drivers should be welcomed, especially if it encourages safer driving.
Aviva used to offer a similar policy, but it was withdrawn several years ago because the technology involved cost more then and premiums for young drivers weren’t as steep as they are now.
Top tip
Remember that there are plenty of other ways young drivers can reduce insurance costs. Taking additional qualifications such as ‘Pass Plus’ can reduce premiums, and you could also consider adding an older, more experienced driver to the policy as a named driver to keep costs down.
Don’t, however, be tempted to ask an older driver to register themselves as the main driver – this is illegal and likely to result in any claim being rejected.
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