Young drivers pay dearly for car insurance

Young drivers pay dearly for car insurance

Driving alone for the first time can be daunting, as can the cost to insure your car if you’ve got P-plates. That’s because car insurance providers base their quotes on the likelihood of you making a claim and assume that the less driving experience you have, the greater your risk of an accident.

For young drivers who are seen as high risk behind the wheel, insurance premiums can be sky high. For instance, a 20 year-old driving a 2010 Holden Barina could expect to pay anywhere from $1000 to $2500 ayear for comprehensive car insurance, according to RateCity research.

Of course there are a number of things that young drivers can do to ensure you get the best available price on the cover you need. Adding an older, more experienced driver to your policy as a named driver may be a legitimate way of lowering the cost of cover.

But having a parent or older relative ‘front’ the policy to lower the cost of car insurance is not allowed. Fronting is when someone registers themselves as the main driver on a policy to reduce premiums when their child or other less-experienced driver is the genuine main driver of the vehicle.

Policies found to be fronted may be rejected at the time of making a claim or worse; voided, leaving the driver uninsured and seriously out of pocket particularly if the vehicle you hit is a Ferrari!

Do it the right way

There are legitimate ways to reduce the cost of your comprehensive car insurance premium and the easiest way is to compare car insurance policies online to find the most suitable cover for you at the best price.

Paying a premium upfront in one lump sum as opposed to monthly instalments can significantly reduce your outlay, depending on the insurer. As can reducing the amount of options on the policy, while adjusting the amount of excess paid at claim time may alter the premium.

Adding a security system and parking your car in a locked garage at night will reduce your risk of claiming in your insurer’s eyes, which will be reflected in cheaper premiums.

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Learn more about car insurance

Does insurance cover a stolen car if keys were in the car?

A car insurance policy that covers the theft of your car, such as third party fire and theft insurance, usually covers a stolen car, even if the keys were in the car’s ignition.

However, your insurer may deny the claim if you live in an area where there have been several car robberies reported recently. They will see you leaving the keys in the car as a case of negligence. In such cases, your insurance provider may even expect you to have installed anti-theft security measures in your car. 

You may need to confirm whether or not you left your keys in your car, and if they had been stolen or misplaced, before filing your car insurance claim. The loss or theft of your car keys may be covered by a comprehensive car insurance policy, but usually as an optional item.

If you can confirm that your car keys were stolen, mention this in your claim as this will help establish that your car was not stolen as a result of your negligence.

Can you insure your car for 6 months?

Most Australian insurers won’t offer you a 6-month car insurance policy, so you may need to buy a policy that covers your car for damages and cancel it after six months. You will need to purchase comprehensive car insurance to protect your car from accidental damage, theft, vandalism, or natural disasters.. 

Consider checking whether your 6-month comprehensive car insurance will cost more if you pay monthly or six-monthly premiums instead of a one-time annual premium. Another question to ask the insurer is whether you’ll need to pay administration or cancellation fees when you cancel the policy.

Alternatively, you can look for a suitable ‘pay as you drive’ car insurance policy, which usually offers you the coverage of a comprehensive car insurance policy but only requires you to pay for the distance driven. Such a policy may not be the ideal 6-month car insurance plan as it is based on how much you drive rather than for how long. If you need to drive a lot, you may end up paying more than you’d pay for regular car insurance.