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Car insurance : soaring insurance premiums for young male motorists

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Young male motorists are being hit hardest by the sharpest rises in insurance premiums for 16 years with average premiums almost doubling in the last 12 months, research has found.

The AA published figures yesterday that showed premiums for drivers aged between 17 and 22 rose by 47% – the biggest jump of any age group.

The motoring group, which has been tracking the car insurance market since 1994, found that the average of three cheapest quotes offered to young male drivers in the group is £2457, slightly less than twice the price offered to their female counterparts.

Its British Insurance Premium Index follows Department for Transport statistics that show almost a third of male car drivers killed or seriously injured in accidents last year were under the age of 25.

There were more than twice as many casualties among young men than young women, explaining why the difference in quotes for first annual car insurance between men and women is so high.

The average claim for a 50-year-old is £1380, while the average claim for a driver under 19 is £3433.

Research has also found young male drivers at the wheel of cars laden with passengers are more likely to have accidents driving at speed or around bends.

The Association of British Insurers said that accidents tend to take place on weekend evenings without any other cars being involved. Young males were found to be more frequently at fault for their accidents than either female or older drivers.

Technical and corporate affairs executive at the British Insurance Brokers’ Association, Graeme Trudgill, said: “The bottom line is that young drivers have more accidents and higher claims costs than other drivers.”

The AA, which based its index on an average of the cheapest three quotes from about 90 insurers, brokers and schemes involving 2800 people, found that car insurance premiums generally had risen by an average of 40.5% over the last year to £703.

Simon Douglas, director of AA Insurance, said: “Five years ago the AA did warn that if insurers didn’t start to put their rates up to reflect rising claims costs then there would be steep increases like we have seen this year.

“Over the past year, on average, for every £100 taken in premiums, £123 has been paid out in claims, which is unsustainable. Insurers have recognised that this can’t continue, hence the large increase in the last 12 to 15 months.”

The consequence of such high rises in car insurance is that many young drivers are unable to afford to insure themselves, and often pay more in insurance than they did for their car.

For 17-year-olds, finding insurance for their first car can be a daunting task, with quotes as high as £12,000 a common occurrence on price comparison websites.

The AA recommends that drivers call the firms offering cheaper quotes and find out how the premium might be reduced.

Alternatives include looking for companies which offer specialised insurance, like those who focus on young drivers, or women. Another recommendation is to buy a smaller, cheaper car or to pay voluntary excess.

‘Some of the quotes were ridiculous’

Fraser Sutherland, 22, from Rutherglen in Glasgow, was quoted a figure of £1464 by Cornhill Direct for his basic one litre Vauxhall Corsa. The amount he pays in insurance premiums has increased each year for the past two years, despite his no claims bonus and a clean licence.

Mr Sutherland, who recently graduated from Glasgow University, where he works full-time as vice-president of the Student Representatives’ Council, has been driving for five years.

He said: “My premiums have gone up but I wouldn’t say by as high as 47%. But as I have never claimed I would expect them to go down, not up. Some of the quotes were just ridiculous – as high as £5000. In every other walk of life everyone has to be treated equally but insurers discriminate based on gender, age and even marital status. I can understand the reasons these factors are taken into account but it still seems unfair.”

Source : Scotland Herald