I know this has been discussed before but........

[welsh dragon]

That would only work if new young drivers were no more than twice the risk, but I don’t think that matches the one-in-five statistic given earlier in the thread.

How can insurance companies work out who the 20% are before they have established any driving or insurance history?

If you, personally, had to cover the potential costs of repairing the damage caused by a random seventeen year old in a car how much would you want to charge? Bear in mind you could be liable for tens or hundreds of thousands of pounds, worst case.

I think you will find it's because they don't have a driving history and are unknown quantities that companies impose higher premiums until they prove they are competent drivers.

That's what the NCD is all about. Each year you are claim free, your percentage of NCD goes up.

 

[newfhouse]

I'd want to charge a lot less than £2-3k

Do it then. You'll capture the market.

 

[newfhouse]

I think you will find it's because they don't have a driving history and are unknown quantities that companies impose higher premiums until they prove they are competent drivers.

Yes, that's what I said.

 

[srw]

Greed. And poor/no regulation of insurance companies.

I run a team of 20, most of us employed precisely because regulation of insurance companies is tight, and the industry takes it seriously. Have a look at Consumer Duty and the FCA's clampdown on Direct Line.

I'm pretty sure their actuarial statistics don't go down to street level, but only down to the out code (First 4 characters of the postcode). And I think they take into account all types of crime.

And more importantly than just crime, they also take into account the general claim history of the area, including the vehicle demographics of those claims. So if your area has a lot of young drivers, making more claims in the low insurance group cars, premiums for those may go up, while higher spec cars may go down relative to other areas.

Address point pricing (house level) has been around for at least the last 15 years. And your second point isn't correct. The models used since the late 1990s have taken great care to strip out second-order effects like that.

guidelines should be clear and transparent and act across all companies. I accept a price hike if I've made a claim and I was at fault. I don't accept that someone else in the same position with a different company does not have to pay anything more than they did last year

Some countries previously had the sort of system you advocate. Almost universally they have moved to the current free market system because it's perceived as fairer, it takes out cost for consumers and encourages better driving.

If you, personally, had to cover the potential costs of repairing the damage caused by a random seventeen year old in a car how much would you want to charge? Bear in mind you could be liable for tens or hundreds of thousands of pounds, worst case.

Tens of millions. The most expensive claim I'm aware of in the UK was the Selby rail crash, which cost about £50m. A claim of £10m+ is easy to imagine - a 20year-old driving four mates who crashes into another car with four young people. Everyone left in electric wheelchairs in need of 24-hour carefor the rest of their natural lives.

My point was to the OP that it doesn't seem fair (to him) that a new driver has to pay £4k per year to insure a car but that's just how it is given the cost of claims made.

Yup. Insurance companies in aggregate make almost nothing from motor insurance - obviously some firms do or nobody would sell it. Distributors make a few tens of pounds per policy. The overwhelming bulk of premiums go in claims.

 

[Sharky]

Have a look at Citroen's. I believe you can buy a C1, with first years insurance included. No doubt that the costs are hidden in the finance plan, but worth considering.

 

[Kingfisher101]

I'd want to charge a lot less than £2-3k, given that I'm already making hundreds of thousands a year from all the other policies where I haven't had to pay out. A cap of £1200 (£100/month) would seem resonable to me. And that would be re-couped in later years if a driver then made an at-fault claim so had a higher premium. It's fair that they are priced out of insurance if they've already totalled someone's car, but to be priced out from the start is pre profiteering as they know parents and family might help towards the cost.

I just think under 25 year-olds have the very rough end of the stick before they've even made a claim, when you could argue that this age group are the poorest and often most transient, and the need for a car is greater as they haven't the luxury of a secure job, secure housing and secure transport schedules like the middle aged have.

There's no security for the middle aged now, that's long gone. Any job in any sector can go at any time and housing well..plenty of middle aged are private renting or in social housing etc. What's this secure transport schedule that you are speaking of exactly?

 

[cougie uk]

By the time you get to my age it seems that very little of your insurance actually covers your driving, and the risks must nearly all be related to theft.

There's a road by me with a guy who has a camper van and a works van on his drive. I know camper vans are very pricey and nickable so he's installed those bollards that pull out of your drive.

I think he's started something though as the two bungalows opposite have done the same thing. Except they have ten year old very plain cars that aren't worth anywhere near the amount.

And the bollards are in the centre of the drive with enough space on either side to happily drive off unimpeded by the bollard.

 

[Beebo]

but the biggest reason for the high premiums isn't lack of experience, it is the recklessness of youth.

Exactly this.
Me and my friends used to drive like complete idiots, usually with a car full of friends.

Most of us got away with only minor misdemeanours.
But if a young driver crashes and kills or seriously injured all 4 passengers in his car, the insurance claims could run into many millions.
It always the third party liability risk which insurers are worried about. The repair costs to an old corsa are negligible.

 

[Ming the Merciless]

I talk to youngsters about their cars and their car insurance. They tell of paying £500 A MONTH!!

How much are they earning (after tax etc) per month?

 

[Drago]

They could always walk, cycle, get the bus. No one is forcing them to rush out at 17 and hock themselves to the eyeballs to buy and insure a car. Hell, the world might be a nicer place if they stopped doing so.

 

[Beebo]

I run a team of 20, most of us employed precisely because regulation of insurance companies is tight, and the industry takes it seriously. Have a look at Consumer Duty and the FCA's clampdown on Direct Line.


Address point pricing (house level) has been around for at least the last 15 years. And your second point isn't correct. The models used since the late 1990s have taken great care to strip out second-order effects like that.


Some countries previously had the sort of system you advocate. Almost universally they have moved to the current free market system because it's perceived as fairer, it takes out cost for consumers and encourages better driving.

Tens of millions. The most expensive claim I'm aware of in the UK was the Selby rail crash, which cost about £50m. A claim of £10m+ is easy to imagine - a 20year-old driving four mates who crashes into another car with four young people. Everyone left in electric wheelchairs in need of 24-hour carefor the rest of their natural lives.



Yup. Insurance companies in aggregate make almost nothing from motor insurance - obviously some firms do or nobody would sell it. Distributors make a few tens of pounds per policy. The overwhelming bulk of premiums go in claims.

Yeah but what would you know. Being an actual actuary.
A mate down the pub told me blah blah blah.

 

[Drago]

I've little sympathy with insurers. Over recently decades they've been spanking each other with various wheezes, like hire cars etc making more income than the premiums do, so when it's their turn to be the one being whipped I can't find it within myself to care.

If they'd behaved sensibly and ethically over the years they'd be making a more sustainable level of profit without the public being bent over and anally invaded for it.

Sadly they and their shareholders can't see further than the next quarters results. As an industry they're not alone in that, but that also means there are many examples of chasing short term return at the expense of a long term sustainable profit which they have chosen to ignore.

 

[Cycleops]

Greed. And poor/no regulation of insurance companies. I had to pay to get a scratch in my door fixed. £350 excess and the repairers did a p1ss poor job. All the wrong people are making all the money

Don't see how it could be. Insurance companies are in a competitive market. If over charging maybe they are operating a cartel?
There are always going to be good and bad repairers.

 

[Cycleops]

I've long held the view that insurers base their premiums not upon any genuinely identifiable risk, but rather upon the perceived ability and willingness of the  victim customer to pay.

i decently moved to a new house in a new street, and as yet there has been no autocrime on the street. None. Nada. I know this for sure as one of my new neighbours is a copper I know fairly well.

Yet the insurance premium on my little 2008 has gone up.

Even weirder, the insurance on my relatively high performance C70 T5 has gone down.

Even weirder, both cars are with the same insurer. What's that all about?

That's probably true, they think you're a soft touch. Maybe time to shop around?

 

[PK99]

It is worth bringing this thread up again in light of events in Wales.
From today's Guardian:

The statistics are stark. In 2022 in Britain, about a fifth of all fatal or serious injury crashes involved young people. Young male car drivers aged 17 to 24 are four times as likely to be killed or seriously injured than over-25s.

https://www.theguardian.com/uk-news...urbs-on-young-drivers-after-fatal-welsh-crash