Why is car insurance more expensive for young drivers?
Young drivers up to 24 years old are considered by many insurers as a risk group for car insurance . Therefore, insurers charge a higher premium for these drivers. Fortunately, not all insurers charge sky-high premiums for young drivers.
The premium for the car insurance depends strongly on the number of accumulated years without claims. But there are more risk factors that insurers pay attention to. Your postal code and the type of car you drive, for example, are also taken into account. These factors are dwarfed by the surcharge that some insurers charge for young people up to 24 years of age. Even young drivers with many years of accident-free driving have to dig deep into their pockets because of their age.
Why is car insurance more expensive for this group?
Insurers determine their own premium policy. And this becomes clear when you compare car insurances. Did you know that the most expensive car insurance sometimes costs multiple of the cheapest car insurance? This is especially true for car insurance for young drivers. Research shows that they cause proportionally more damage due to recklessness and inexperience. The playful behaviour in traffic brings extra risks for insurers. Because of this, the chance of damage is not only higher, but often the average damage costs are high.
Why are the differences so great?
Insurers' premium policies allow them to steer their portfolio. Insurers who do not want many young drivers on their books apply a high mark-up. Insurers who charge a low mark-up for this group conclude proportionally more car insurance policies with young drivers. This can therefore be partly explained by insurers' policies.
Is this age discrimination?
Insurers are not allowed to make a distinction based on age. This is allowed if there is a demonstrable difference. Young drivers demonstrably cause more damage on average, so a difference in premium is allowed.
Putting the car in the parents' name?
You can avoid a higher premium by putting the car in the parents' name and insuring it. Unfortunately, that's not going to work. Premiums depend on the regular driver. Parents who designate themselves as regular drivers are committing fraud if this is not true. The result may be that the insurer can terminate the insurance immediately and will not pay claims. In practice, this is difficult to prove, but it is possible.
Also, if young people insure the car in the name of the parents, they do not build up claim-free years. As a result, young people continue to pay comparatively high premiums for car insurance even when they are older.
There are some insurers who focus on young people, but that is not the solution. When taking out insurance, you want the best insurance at the lowest premium. You can get this by comparing.
Important to build up claim-free years
For young drivers, it is important to build up years of accident-free insurance. At a young age, there is often only enough money for an older car with third-party insurance. At a later age, there is usually more money available and more expensive cars are bought. The more expensive cars are insured against third-party liability. In a WA car insurance you can often build up valuable damage-free years relatively cheaply. As soon as a more expensive car is bought, a high discount is built up in the form of claim-free years.
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