Government responds to young drivers’ pleas for cheaper car insurance

A petition asking the Government to put a cap on car insurance for 18 to 25-year-olds, which attracted over 185,000 signatures, has been debated in parliament.

The petition suggested capping insurance costs at £1,200 to make premiums more affordable for young drivers, who commonly face costs in excess of £2,000, and sometimes £3,000 a year.

Members of Parliament debated the topic on 20th March 2017, but although they outlined several initiatives which, in time, ought to lead to lower risks and subsequently lower premiums, they do not propose to intervene directly in the way insurance companies set car insurance premiums.

Government measures to reduce car insurance

Strengthening the driving test

The Government has been debating this for a while (we first wrote about it in July 2016), but in April 2017 they published details of a consultation to improve and update the driving test to better prepare drivers’ skills to operate a vehicle safely.

The proposals include suggestions to:

  • Increase the independent driving section of the practical driving test from 10 to 20 minutes.
  • Ask drivers to demonstrate the ability to use a sat nav, in addition to the current practice of following road signs. 
  • Ask drivers to perform more challenging manoeuvres during the test
  • Test a candidate’s ability to answer questions or operate in-car instruments and technology while on the move instead of at the start of the test.

Raising the standard of testing should, the Government suggests, lead to fewer accidents, injuries and insurance claims, which they believe will ultimately lead to lower premiums.

Requiring insurers to prompt customers to shop around

Rules that came into force on 1st April 2017, require insurers to put more information on renewal paperwork, reminding customers of their premium the previous year and prompting them to shop around for the best deal.

Car insurance is a very competitive market, but by encouraging drivers to compare prices, they believe insurance companies will have more incentive to remain competitive.

Black box insurance

Evidence suggests that new drivers could save money with a telematics or black box insurance policy. This technology means a driver’s premium is calculated on their actual driving behaviour, helping to differentiate them from other young drivers who take more risks.

Action to reduce whiplash injury claims

For many years, car insurance premiums have been negatively affected by the rising number of costly whiplash injury claims. The Government has announced reforms to tackle minor, fake or exaggerated claims, and they expect insurers to pass the subsequent savings back to drivers through lower premiums.

Drivers who signed the petition may not be entirely satisfied with the Government’s response, but following a debate which lasted over two hours, it can at least be said that MPs took drivers’ concerns seriously. The debate in Parliament can be watched in full here.

If you’re finding it difficult to find affordable insurance, 4 Young Drivers can help.

Get a Quote for telematics (Black Box Insurance)

Get a quote for non-telematics insurance (Non-Black Box Insurance)

Released On 23rd May 2017

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