Why Is Car Insurance For Young Drivers So Expensive?

Insurance

3 min read

As anyone who’s ever had to pay for it will tell you, the cost of car insurance for young and first-time drivers is notoriously high. In recent years, it’s been estimated that the average cost of insurance for a 17-20 year old male here in Northern Ireland is an eye-watering £2,430.

That’s a lot of money to anyone and can make it difficult for young people to get on the road, with some people being put off learning to drive altogether by the high cost of insurance.

However, there are many myths and misconceptions about why it is that young driver insurance is so expensive. Below, we explain why younger motorists typically pay more for their insurance.

Why is young driver insurance so expensive?

As we’ve explained before, the insurance industry is all about calculating risk. The amount that your insurance provider charges you for your policy can depend on all sorts of different factors, but above all it’ll depend on how likely they think you are to make a claim.

It’s important to stress that this is nothing personal and that insurers are aware that not all young drivers are bad drivers. Unfortunately, the decades’ worth of statistics that insurers base their quotes on all show that drivers under 25 years old are more likely to have an accident than those in any other age group.

Ultimately, this all boils down to experience.

Even if you’re the picture of a model motorist from the moment you pass your test, young drivers are on average less experienced and therefore more likely to have an accident. Consequently, they’re therefore more likely to make a claim on their insurance and insurance providers increase the cost to offset this.

The same will apply to any first-time motorist, who will experience much higher insurance costs than someone who’s been driving for a while, regardless of their age. But it’s younger drivers that are hit with the highest costs due to the fact that statistics show they’re riskier on the road overall. 

Are young drivers really more likely to have an accident?

This is by no means indicative of your own abilities as a motorist. Every single one of us is affected by the same statistics in some way, but there is a significant wealth of data which shows that drivers aged between 17 and 24 are more likely to have an accident, and more likely to be killed or seriously injured in a car crash.

According to research from the RAC Foundation one in five young drivers will have a crash within the first six months of driving. Similar data from road safety charity Brake shows that a quarter of 18-24 year olds will crash within two years of passing their driving test.

Here in Northern Ireland, more than a quarter of all people killed on the roads in the past three years were aged between 16 and 24 according to PSNI data.

Research also shows that younger drivers are less able to accurately assess hazards due to inexperience, are more likely to engage in high-risk behaviours like speeding and are more likely to be over-confident in their driving abilities than drivers aged 25 and above.

Stats like this go on and on, and even though in Northern Ireland the number of young drivers killed on the roads has decreased in the past few years, people aged between 17-24 still make up a disproportionate number of those killed and seriously injured in car accidents.

This supports the idea that young drivers are overall more at risk than older or more experienced motorists. Insurance providers will then charge younger drivers more for insurance due to the fact that there’s a greater chance they’ll have to pay out for a claim.

So, are insurance companies just greedy?

It’s important to stress that this isn’t true. The reason that insurance providers charge young drivers more for their insurance isn’t just due to the fact that they’re more likely to have an accident, but also because the average cost of their claims is much higher than that of the average motorist.

Data from the Association of British Insurers shows that the average cost of a claim for an 18-20 year old is £3,667 – nearly £1,500 more expensive than the average claim for someone aged between 61-65. This is due to the fact that younger drivers are more likely to have more serious accidents, which will result in higher repair bills and more expensive claims for personal injury.

As a result, if insurance providers have to pay out larger amounts more often for younger drivers, it only makes business sense that they’ll have to charge more for insurance in order to balance out the costs.

How can I reduce the cost of my car insurance? 

One of the best methods is by taking out a telematics policy like ChilliDrive, which can offer significant discounts to new drivers using a device which monitors your driving style and actively encourages better, safer driving.