What's the answer for Under 25's Car Insurance?

While there's no magic age when people suddenly become responsible drivers - if indeed some ever do - I'd say it's the inexperience that's the problem, not the age. Delaying getting a licence until 25, even though it may mean moving into a lower-risk insurance pool, isn't likely going to change much of anything if the driver still doesn't know what they're doing.

Having to demonstrate ability and safety first on a bicycle, then a scooter, then a motorcycle, and finally a car, would make for much safer motorists with respect for all road users.

The fairest thing to do is keep everyone in the same pool, and charge extra based on driver experience. If someone has demonstrated that they're a higher risk, either through ticketable offenses or causing an accident, then they should pay more. Safe-driver discounts are an effective and fair way to achieve this for all ages.

Here, new drivers have to go through a graduated licencing program. After passing a written test, they can drive only with a licenced adult, and are restricted from driving at night, from carrying other passengers, and have all privileges revoked if they get a ticket. My understanding is that this applies to all new drivers, regardless of age.

 

around here, it's never been a big deal. we had to pay about 20% more on our insurance for our kids, then they took it over when they got cars. a couple hundred bucks. they did like it when they hit 25 tho!

 

I think it's both. Experience is important, but teen-agers' brains are not yet fully mature, and their judgement is not yet entirely sound. They are also more subject to being influenced by their hormones. Different people mature at different rates, but younger drivers, as a class, pose a greater risk than adults (until the adults begin to lose coordination with advancing age) and boys pose a greater risk than girls. Within each class there are large variations and much overlapping of classes. But insurance companies study the odds and set their prices accordingly.

"Black boxes" would allow insurance companies to assess individuals and adjust rates accordingly, and that would probably be a good thing, as young people could earn lower rates by safe driving, and reckless adult drivers would have to pay more. Monitoring your behavior in public is not IMO an invasion of privacy.

 

I understand the insurance companies' reasoning, but it's still age discrimination. Maybe blondes have statistically higher accident rates, or short people, or fat people, or heterosexuals - that doesn't mean such arbitrary classifications are a valid method of setting insurance rates. Punishing someone for something they haven't done yet is unfair. Separating the population into identifiable groups might make for higher profits, but it doesn't make for safer roads.

 

How about age discrimination in the life insurance business. If I could self insure, that would be the ultimate in discrimination. (Humor).

Seriously, Insurance is changing from a personal risk decision into a government social engineering avenue. (e.g. the governments are continuously getting more specific about what insurances I must have and what coverages I must have.)

 

The first 3 minutes of this video explain it all.

I'd think the best answer is what the Euro's are doing in that BBC article - no longer offering discounts just purely based on whether someone is female. Of course, that's just shaving a few quid at the margins. I distinctly remember trying to get insurance at 16 and not finding anything for less than $150 per month - mind you, this is for bare state-minimum coverage.

(Then, at 21, I switched companies, shaved it to $38 a month, and haven't looked back.)

I always said, at 16, that if my insurance went up anymore I'd just cancel it, drive without insurance, and take the risk. Irresponsible? Yes. Unwise? Certainly. But the insurance company was assuming I'd completely write off my car once every year.

And, fingers crossed, it's been six years without so much as a ticket (ok, I have, but I've had them all thrown out in court so far). The Prius, of course, has far better coverage - for a fraction of what I paid when I was 16.


As a middle of the road solution, start out teenage drivers with lower insurance rates, but greatly increase them as the tickets and accidents pile up? When I say that, I don't mean double - I mean triple or more. It still isn't perfect, but it's better than pricing drivers out of it and forcing them to drive without any insurance at all.

 

I know there are people in the states that will advise you to keep your kid's car on your insurance policy so that it is cheaper for them. If you do, make sure you have a good umbrella policy.

A few years ago, someone that I know was hit almost head on by a 21 year old college student coming home from college. The totaled cars was only the start of it. Four people in the hit vehicle, two were taken by air ambulance and two by ground ambulance. One has permanent damage.

Georgia's state minimum thresholds are very low. The insurance company for the vehicle not at fault sued the college student, the college student's father and the insurance company. The insurance company paid off the limits of the liability policy then the father was on the hook for the rest.

So the father, who was doing his daughter a favor by insuring the car in his name wound up in bankruptcy because she got drowsy behind the wheel.

My daughter is nine but when she hits 16 she'll either have her own policy or I'll have an umbrella policy to protect my assets.

 

Hi Southern Dad--

As a law student, this bears repeating. The first thing that any student will learn in civil procedure is that it isn't worth suing someone who doesn't have any money. Thing is, in the event of any accident, the not-at-fault car is free to lawyer up at their whim, and sue the insurance company, you, and your parents (if the parents are on the insurance premium).

Thing is, if you have any assets worth mentioning, it would be wise to bump up that insurance coverage, because the increase in premiums is nothing compared to when someone sues your pants off when you T-bone the van full of children because of sudden, unintended acceleration (or insert your excuse here - accidents do happen, you know).

If you're poor and don't have much in the way of assets? By all means have minimum coverage, liability only. The not-at-fault party will win the maximum from the insurance company, sue you, probably win, but a court can't squeeze blood out of a turnip - meaning they'll win a judgment against you, but if you simply can't pay... you can't pay, and you likely won't ever have to pay the judgment (not in full, at any rate).