Young drivers clueless when it comes to insurance: Phone Driving

08 October 2019, 09:31

Young drivers clueless when it comes to insurance

  • GoCompare Car Insurance warns that young drivers’ lack of understanding could leave them at risk if they need to make a claim;  
  • New free excess protection policy1 will pay-out up to £250 for qualifying* car insurance claims. The offer aims to raise awareness of excesses which are among the least well-understood aspects of insurance.

New research2, commissioned by GoCompare Car Insurance, reveals that 18 to 24-year-old drivers are clueless when it comes to car insurance.  Most (65%) buy insurance on price alone, while only 47% check cover levels to make sure they understand what they are committing to and have the cover they need.

GoCompare Car Insurance warns that young drivers’ ignorance about car insurance could leave them at financial risk if they need to make a claim.   

The research looked at young drivers’ understanding of 15 common insurance terms.  This revealed worryingly low levels of awareness of key aspects of car insurance.  For example, only a third of drivers understood ‘social, domestic and pleasure’ – which classifies how you intend to use your car.  This classification covers normal day-to-day driving including trips to the shops or to visit friends and family – it does not cover commuting or using your car for business.  Using your car for the wrong class of use can invalidate your cover and, your insurer may refuse to pay a claim.   

Rank

Insurance term

% of young drivers (18 to 24) understanding the insurance term

1

Named driver

52%

2

Windscreen cover

49%

3

No claims bonus

46%

4

Owner/registered keeper

46%

5

Driving other cars

45%

6

Courtesy car

45%

7

Third-party, fire, and theft

44%

8

Comprehensive cover

42%

9

Personal accident cover

40%

10

Compulsory excess

36%

11

Legal assistance

34%

12

Social, domestic and pleasure

33%

13

Voluntary excess

31%

14

Protected no claims

29%

15

Policy exclusion

20%

The survey also revealed that few young drivers understand policy excesses - so were unaware of the financial contribution would need to make in the event of a claim.  Excesses are an important element in the total cost of insurance.  In the event of a claim, drivers aged under 25 are usually required to pay a young driver excess on top of their policy’s compulsory excess.   However, only 36% of young drivers surveyed know what a compulsory excess is, while less than a third (31%) understand the term voluntary excess.

The survey also looked at young drivers’ experience of making a claim.  Of those who had recently claimed on their insurance:

  • A fifth hadn’t realised they would have to pay towards to cost of their claim;
  • 11% hadn’t appreciated the voluntary excess they’d chosen to pay would be added to the compulsory excess required by their insurer;
  • For an unlucky 9%, the excess was higher than the value of their car.

Commenting on the research Lee Griffin, CEO and founder of GoCompare said, “Insurance is an essential element in driving.  Not only is it a legal requirement to hold insurance, in the event of an accident, it provides financial protection for vehicle damage and, injuries to passengers, other drivers and pedestrians.  

“Insurance policies differ wildly in the amount of cover they offer.  So, when arranging cover price shouldn’t be the only factor you think about.  It’s vitally important to pick a policy that suits your needs and personal circumstances.  Otherwise, you could find yourself without cover when you need it most.”

Lee continued, “Statistics3 show that young drivers are far more likely to be involved in an accident than drivers aged 25 and older, which is why they are likely to pay more for cover.  While only representing 7% of UK license holders and driving fewer miles, drivers aged 17 to 24 have a higher casualty rate given the distance travelled compared with all drivers.   

“One option for young drivers looking to cut the cost of cover is to agree to a voluntary excess.  This means they will have to pay more toward the cost of any future claims as the voluntary excess is added together with the compulsory excesses.  Young drivers already have higher compulsory excesses than older, more experienced drivers.  So, if they’re aiming to save on their premium by opting for voluntary excess, they need to make sure the total sum of excesses is affordable.

“To help cushion the financial blow of making a claim, customers arranging car insurance through our website can benefit from free excess cover.  The offer applies to all drivers – no matter their age.  Qualifying car insurance customers will be able to claim back up to £250 towards their excess if they need to make a claim.”

For more information on insurance for young drivers visit: https://www.gocompare.com/car-insurance/young-drivers-car-insurance/

-Ends-

For further information please contact:

Anders Nilsson or Louisa Marsden at GoCompare on 01633 654 054 / 01633 655 132

Gordon, Jason or Liz at MAW Communications on 01603 505 845

Keep up-to-date with GoCompare on Twitter; @GoCompare

Notes to editors

1The offer applies to fully comprehensive policies and is open to anyone who buys a valid car insurance policy from GoCompare during the offer period.  The policyholder must be 17 years of age or older and a permanent UK resident. The customer will qualify for the free excess protection cover for the duration of their car insurance policy (12 months max).  Excess Protection Insurance is provided by a separate policy, underwritten by AXA Assistance (UK) Ltd.

2On 15 July 2019, Bilendi conducted an online survey among 2,000 randomly selected British adults who are Maximiles UK panellists.  The margin of error-which measures sampling variability-is +/- 2.2%. The results have been statistically weighted according to the most current education, age, gender and regional data to ensure samples representative of the entire adult population of United Kingdom. Discrepancies in or between totals are due to rounding.

3Department for Transport “Young Car Drivers Road Safety Factsheet (2016) May 2018”.

GoCompare

GoCompare is a comparison website that enables people to compare the costs and features of a wide variety of insurance policies, financial products and energy tariffs.

GoCompare does not charge people to use its services, and it does not accept advertising or sponsored listings, so all product comparisons are unbiased. GoCompare makes its money through fees paid by the providers of products that appear on its various comparison services when a customer buys through the site.

GoCompare does not sell its customers’ data.

When it launched in 2006, it was the first comparison site to focus on displaying policy details rather than just listing prices, with the aim of helping people to make better-informed decisions when buying their insurance. GoCompare has remained dedicated to helping people choose the most appropriate products rather than just the cheapest, and has teamed up with Defaqto, the independent financial researcher, to integrate additional policy information into a number of its insurance comparison services. This allows people to compare up to an extra 30 features of cover.

GoCompare is the only comparison website to be invited to join the British Insurance Brokers’ Association (BIBA) and is authorised and regulated by the Financial Conduct Authority (FCA).

For more information visit www.gocompare.com and www.gocomparegroup.com

Contact Information

Louisa Marsden

Senior PR Executive

GoCompare

01633 655 132

louisa.marsden@gocompare.com