£17,000 Insurance Quote Betrays Young Driver Risk

A popular daily tabloid has this week published a story about a teenager who was quoted £17,000 to insure his 1-litre Vauxhall Corsa, which is worth a

A popular daily tabloid has this week published a story about a teenager who was quoted £17,000 to insure his 1-litre Vauxhall Corsa, which is worth approximately £2,000. Sixteen-year-old James Hayes, who is 17 next week, purchased his Vauxhall Corsa ahead of driving lessons. As many youngsters in his position have discovered, however, obtaining insurance can be far more difficult and costly than purchasing the car itself. Indeed, James was quoted a seemingly exorbitant £17,000. With other quotations for comprehensive insurance as high as £3,555, James would be forgiven for thinking the worst of insurers – but do his concerns fail to appreciate why the premiums are so high?

Firstly, James obtained the quotations while still aged 16, which could affect the insurers' risk assessment of him. If this made little impact on the premiums quoted, the fact that James would be a provisional driver for a period of his policy, could also prompt concern. However, James is most heavily disadvantaged not by his own circumstances, but those affecting other teenage boys. According to the road safety charity, Brake, male drivers aged between 17 and 20 are up to ten times more likely to be killed or seriously injured on British roads than older motorists. Brake also claims that 20 per cent of new drivers experience a road traffic accident within six months of passing their driving test. In short, young drivers pose a considerable risk to other motorists – a risk that is absorbed by high insurance premiums.

Car accident claims involving young male drivers are common in the UK, which is another reason why James' quotations were so high. Rather than compare the quotations to the value of his vehicle, James ought to understand that his insurance must factor in the losses of third parties. If James were to drive into a Mercedes and kill or seriously injure its occupants, for example, the cost of his own Vauxhall Corsa would be largely irrelevant in the context of a personal injury claim. It has been argued that insurers who charge young drivers exorbitantly only serve to contribute to the number of uninsured motorists on the road But there can be no excuse for any driver who chooses to violate the law because of the costs of motoring. Uninsured drivers cost the motor industry in Britain around £500 million each year.

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