Honesty is the Best Policy By Sheila Challiner At Isnare.com Ezine Articles

Norwich Union has introduced some attractive policies for 17-29 year olds to help them with their No-claims bonuses. "We offer a rapid bonus scheme. Basically, you insure the car in a block of nine months, at the end of which you are credited with a full year's no-claims bonus," explains Norwich Union’s Mr Nelson. "In effect, you can build up a full five-year bonus in less than four years."

They had to re-think their ‘Pay-As-You-Go’ insurance initiative which was reliant on GPS systems installed in drivers cars. Monthly, their driving would be assessed based on the time of day the car was used and the mileage and a bill sent according to their results. So, if a motorist did fewer miles at off peak travel times, they would be less likely to have an accident, therefore lower risk and should pay less for their car insurance.

Mr Nelson said, "The scheme was open to young drivers and we were able to cut their premiums. We saw a 30 per cent fall in accident rates as people thought about their car use. We had hoped, though, that the car manufacturers would start offering the GPS boxes as standard. Ultimately, the expense meant we had to call a pause."

More Than offers cheaper premiums to 17 – 22 year olds who agree not to drive between 11pm and 6am using the GPS technology to check whether the car is used during ‘curfew’. If it is they will incur a £25 penalty. Mr Maxwell at More Than said’ “People can drive during the night time but they will have to pay for the privilege."

"We are trying to understand the dynamics of the young driver market and see what technology can do for us and the policyholder. The big idea is to price more accurately, so responsible younger drivers can avoid very high premiums." They estimate that to install the GPS technology costs £250, but, Mr Maxwell says it is worth it.

There are conventional ways to reduce premiums "Look at taking the Pass Plus driving course. This advanced qualification can bring discounts of 10 per cent on premiums," says Mr Nelson.

Careful consideration when choosing a car make and model can make a difference to insurance cost, says Mr Lewis, "Go for a smaller car in a low insurance group. And consider if you should go with third party, fire and theft cover rather than fully comprehensive, and whether you need the car for commuting or just leisure driving."

Or, voluntary excess is a recommendation of Mr Maxwell, "Younger drivers will have an excess imposed, but by agreeing to a slightly larger one, the premiums can be cut."

The message from insurers is to not be tempted into fronting. "One of the first things we check when a claim comes in is whether there has been any fronting," says Mr Maxwell. "It's not a wise move."

Unintentional Fronting

Kev O’Sullivan, 26, unintentionally fronted, "I had a Fiesta insured in the name of my parents but I took it to university with me. It was only afterwards that I realised I had been fronting. The campus is quite out of town, so lots of students drive and all the ones I knew were insured in the name of their mothers or fathers. It was the only way that premiums were even remotely affordable. Why would any 18-year-old buy car insurance?”

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