The car insurance industry is going through a pretty big transitional period at the moment, with changes in the law and technology potentially making the cost of cover for teenagers fairer in the future.
First of all was the European Gender Directive which came in last year and told insurers they could no longer take your sex into account when setting your premiums. Teenage girls always used to get cheaper cover than teenage boys because, statistically, they were safer drivers.
When it comes to safety, that’s still the case, but the Gender Directive is closing the disparity between the price of cover for men and women, with women’s cost increasing slightly and men’s costs falling.
Then there’s the emergence of telematics insurance, which uses actual data about your driving to give you a bespoke car insurance quote, rather than setting your premiums on assumptions about your driving based on your age, gender, experience and so forth.
A small, GPS-enabled device is installed in your car (it plugs directly into your car’s diagnostic port) which records and transmits data about your acceleration, braking, cornering and such to the insurer.
This means that safer drivers benefit from cheaper cover – which is why it may become particularly popular with conscientious teenage drivers. In fact, 15% of all car insurance quotes run at MoneySupermarket are now for telematics policies.
Les Roberts has written a series of articles about telematics, which you can read here, here and here.
Finally, the government is looking at doing something about the high cost of teenage motoring too. As I explained in this article, the Department for Transport has put together a Green Paper report looking at solutions to the problem.
It mainly talks about putting new drivers through more rigorous training and testing before letting them loose on the roads, and even restrictions of the number of passengers new drivers could carry, and curfews.
