Young drivers’ premium to go down by approximately 20 per cent.
Insurance and young adults aren’t usually the best of combinations, but the latest news announced by the insurance industry that young drivers’ premiums could lower by as much as 20 per cent has proved to be an ideal partnership.
Also, a pledge was made on April 15th during a meeting in Westminster to support this new move – so long as new proposals are successful in lowering both the value and frequency of any motor insurance claims.
Whilst the pledge has been designed to help younger drivers by giving “back any premium as a result of a reduction in claims,” it’s early days to identify the exact reduction. However, there is a strong confidence behind the notion that lower claims numbers, will equal lower premiums for all.
Chairman of the Motor Insurers’ Bureau, Keith Morris, is hopeful that an investigation into fraudulent whiplash claims will prove fruitful in reducing the number of claims – emphasising the need to defend any legitimate claims whilst trying out new means of reduced premiums.
The government has been working for some time to encourage reduced premiums in different ways, including:
Looking into the whiplash claim issue,
Challenging conditional fee agreements
Restructuring the legal procedure
Parliamentary Under Secretary of State for Justice, Helen Grant, said that this would “help create savings that insurers can pass on to their customers through lower premiums.”
Improving premiums and safety
In addition to reducing premiums, many believe that more needs to be done with improving safety – implementing a combination of education along with technology and regulation.
While the majority believed rewarding young drivers who practised safe driving with lower premiums was an extremely important issue, there was a strong sense of agreement in implementing a ‘graduated driving licence’.
As with any safeguarding measure it’s essential that a healthy balance is maintained. The government stated that it would be inviting a number of different proposals designed to improve safety amongst young drivers, receiving submissions including the establishment of a minimum one-year learning period and restrictions on driving at night.
Advice for Business Owners
Yet the biggest issue the motor trade insurance industry currently faces is how young drivers will respond to these proposals.
Motor insurance can be a daunting prospect for any business employing young drivers, which is why it’s important to compile a list of credible motor traders suited to your needs. Taking the time to do your research makes all the difference, and you could find yourself better off than going with the first available option.