Buying car insurance
Car insurance is something we’d all prefer to do without and as a young driver it’s even more painful because of the necessarily high cost. But if your child is to drive legally they must be insured. The reason why insurance is so costly for young drivers is because statistically they’re likely to be involved in a crash. But it is possible to cut the cost without cutting corners, and that’s to opt for a telematics-based insurance policy. This involves fitting a black box to your child’s car, which monitors how they drive. If they drive well they can see their premiums tumble.
Most people who buy a telematics insurance policy do so because they want to save money. That’s fair enough because taking this route can shave hundreds of pounds off your insurance – or even thousands, after the first year.
But telematics isn’t just about financial benefits. Many of the young drivers who have a black box fitted to their car drive more carefully as a result. Part of this is because they know their premiums will go down if they drive well, but they also know that if they drive recklessly they’ll be penalised by their insurer.
Telematics insurance isn’t about being bullied into driving more carefully though. Many young drivers are often unaware that they have bad habits such as breaking speed limits or going round corners too quickly. The app that comes with most of these schemes allows them to see at a glance how they could improve their driving.
Even better, because that app is visible via an online portal, as a parent you can also see how well your child is driving and whether or not they need guidance on how to improve.
Other ways to cut your premium
The key to cutting insurance costs is to phone as many companies as you can – and use price comparison websites too. Some of the most suitable insurers don’t appear in these though, and before you take out cover, read online forums for user reviews. Get some personal recommendations don’t just go for the lowest price; pay a bit extra if you’re getting a lot more for your money.
Also, be totally honest. You’re entering into a contract with your insurer. You wouldn't expect them to lie to you, so don’t lie to them. Your premium is based on the risk you pose; if the risk is higher, the premium will be also. Here’s how you could potentially shave hundreds off your premium:
- Shop around to get the best price and deal.
- Try to price match, playing off one insurer against another.
- Leave your car standard; insurers don’t like big stereos, spoilers and flash wheels.
- Don’t claim for small things if you scrape your car; you need to build up a no-claims bonus.
- Consider a larger excess – but one that you can afford.
- Fit a security system – and use it.
- Keep the car garaged, rather than on the street.
- Opt for a limited mileage policy.
- Fit a black box.
A word on fronting...
What you absolutely mustn't do when trying to cut the cost of car insurance is to front. This is when a child who is the main driver of a car is added to a parent’s policy merely as a named driver. It seems harmless enough, but it’s illegal as it’s effectively insurance fraud. Get caught fronting and your insurer can charge a penalty or cancel the policy. After this, getting fresh cover could be very costly if not impossible – also remember that insurers can refuse to pay out in the event of a claim because you've effectively broken the contract with them.
You’re telling your insurer that they’re taking on one level of risk when in fact they’re taking on something else altogether. So if you crash your car and fronting is suspected or proven, the policy could be declared void and the claim rejected. And even if you don’t crash your car, you won’t build up any no-claims bonus of your own. Which is why you must avoid it at all costs.