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Discount deals for young drivers are disappearing, says the AA.
publication date: Jan 19, 2012
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author/source: Robin Roberts
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The rising trend for the typical quoted premium for an annual comprehensive car insurance policy has resumed over the third quarter of 2011, after a brief stall. According to the AA's benchmark British Insurance Premium Index, the Shoparound price is now £971.40, a 5.4% increase (from £921.38) over the three months ending 31 December. The annual increase is 15.3% (from £842.69). Simon Douglas, director of AA Insurance, is surprised that the increase was this large, adding, "I expected a much smaller rise, especially following the small fall in premiums during the third quarter of 2011. "The difference shows that the cheaper deals are disappearing. Young drivers seem to be the biggest losers with a higher than average increase for them. It's clear that young drivers continue to be of concern to insurers, while many no longer offer cover to those under 21." The Shoparound index is an average of the three cheapest quotes from a range of insurers, brokers and schemes. The main Index, which is an average of all quotes for each ‘customer' in our basket of risks, rose by just 0.6%. Young drivers · The latest figures from the Department for Transport confirm that young men under age 24 account for 28% of all those killed or seriously injured on Britain 's roads and that there are more than twice as many casualties amongst young men (1,153) than young women (514). · The Department for Transport figures explain the big difference in premiums for young men and young women. According to the AA Shoparound figures, the average premium quoted for men aged 17-22 is £3,194 and for women in the same age group, £1, 879: 41% less However, following last year's European Court of Justice ruling that using gender to set insurance premiums is discriminatory; insurers will no longer be able to take gender into account from December 2012. This means that everyone who has bought a car insurance policy since the end of December will find that their next renewal will be affected by the ruling. "Young women will be see the biggest premium increases," says Mr Douglas. "It is unknown territory for insurers who will be careful to avoid significant losses they can ill afford." The ECJ gender ruling has opened the way for more widespread use of telematic or ‘black box' insurance, which sets premiums based on driving performance. "It puts ownership of responsible and safe driving firmly in the hands of the driver, regardless of their sex. It is genuinely a gender-neutral product," Mr Douglas says. |
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