The ECJ’s ban on using gender as an assessment factor when calculating insurance policies may
soon mean men have access to cheaper car insurance but for many young drivers in 2011, insurance premiums are simply too expensive or unavailable altogether. That could all be set to change, however, with the introduction of a ‘pay-how-you-drive’ initiative by the Co-Operative Insurance.
The Co-Op’s new insurance policy, aimed exclusively at the 17-25 age group, includes the installation of a Smartbox – like a black box recorder on an aeroplane – to record how the young driver handles the car on the road, sending information back to the insurance company so that they can then determine whether they need to reduce or increase the policy holder’s premium.
According to the Co-op, over three quarters of young drivers will be helped to achieve much lower premiums, averaging a saving of £328 per year, per person.
The policy will still be include a No Claims Discount with the policy, making it a particularly attractive one to those wishing to get a foot on the ladder of their car insurance career. Performance-based reviews will occur every three months to determine whether or not the young driver in question will receive a ‘safer driving discount’.
The Smartbox will send information using satellite technology back to the insurance company on factors like speed, acceleration and braking, cornering, and what time of the day or night the young driver is driving at. If the driver proves to be diligent, they stand to make an 11 per cent saving on their premium. Drive badly, and they could see an increase of as much as 15 per cent.
The Parliamentary Transport SelectCommittee investigation, a document commissioned by the
government this year, outlined how the challenges faced by the insurance industry have been
addressed, with investigators having made recommendations on how to tackle and get around
issues such as the cost of insurance for young drivers.
According to a related article in moneysupermarket.com car insurance news, there are other things that young drivers can do decrease their car insurance premium, such as adding and older, more experienced driver as a named driver. It does, however, warn that young people and their parents must not, under any circumstances, add that driver as the main driver. This practice is known as ‘fronting’, is tantamount to fraud, and offenders will be prosecuted.
