‘Sky high insurance’ is creating a road safety hazard: IAM

12.01 | 5 September 2011 | | 5 comments

The IAM has called on insurance companies to overhaul the system used to calculate prices for young drivers, claiming that insurance premiums are pricing them off the road and jeopardising road safety.

IAM research on a popular price comparison website found that the cheapest annual premium for an average 17 year old driver was £7,091.38. The top price quoted was just over £9,700.

Neil Greig, IAM director of policy and research, said: “Young drivers can only learn safer driving by practising it, but huge insurance premiums risk pricing them off the road. The challenge for the government, the insurance industry and road safety experts is how to balance the need for experience with the very real risk that young drivers pose to themselves and other road users.

“When an insurance premium is matching university tuition fees, innovative thinking is needed to reward the safest young drivers or spread the cost in a more manageable way.

“Many young people will need a car to get to work and there are serious implications to the economy of young people who are unable to afford to drive, and to road safety if drivers simply choose to forgo insurance.”

For more information contact the IAM Press Office on 020 8996 9777.


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    In response to Jim in Aberdeen’s comment “that is not bad.” Let us do a couple of comparisons. At 21, living in London, I bought my first motorcycle. An absolute beginner with no experience or training, riding on L plates to commute to work. I got third party, fire and theft insurance for £4-9s-11d. Less than a third of my weekly wage of £15.

    Jim’s boy was quoted £3,100 for third party only for driving in Aberdeen, not London. Is that a third of his weekly wage? I doubt it.

    Last year I tried to put my son, aged 17 and taking lessons, on a policy to drive my second car, a 1995 Vauxhall Corsa, worth about £350/£400 if that. The cheapest quote for third party only was just under £1,000 with a percentage to be added for instalments. The dearest quote was nearly £8,000 and no offer of instalments. Once he had passed the test the premium would be increased because “he would now be driving unsupervised.” He has a weekends-and-evenings job that earns him £200 a month. Five months wages to pay the cheapest quote with nothing left for the occasional McDonalds.

    Let us look at qualifications, I am a member of IAM (motorcycles, cars and HGVs). One company said they give 5% discount to IAM members. I asked, if I were not a member, would they give me a discount for being a retired Class-One Advanced Police Motorcyclist, used as examiners for both IAM and the RoSPA Gold Award. No, they said, we don’t recognise that as being of any benefit. Aren’t insurance companies ignorant at times.

    For reasons of social inclusion, road safety and compliance with the law, the IAM are perfectly right to highlight this issue but, as I said in an earlier response, what can be done to stop this corrupt behaviour by insurers.

    Roy Buchanan, Epsom
    Agree (0) | Disagree (0)

    Last year, when he was 18, my son took and passed (at silver level) his RoSPA Advanced Drivers and Riders test. Impressed?

    His insurance company wasn’t, it made no difference to his premium and the quote from RoSPA’s preferred insurer was even higher!

    Martin, Suffolk
    Agree (0) | Disagree (0)

    I have just done a search on GoCompare I was offered 3rd Party Cover for a 17 year old male with no previous experience for £3100. That is not bad, what do IAM expect?

    Jim Mennie, Aberdeen
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    There are two issues here.

    Insurance companies are notoriously profligate when raising their premiums for motoring. My car insurance increased by 70% this year because, allegedly, drivers living in my post-code area have been having an increasing number of collisions. I have not had any, so I found another company who charged me only £10 more than last year. How do we police insurance companies to prevent this corrupt practice?

    The second issue is road safety.

    Young people simply cannot afford four-figure premiums and, if the desire or necessity to drive is high, then they will take the low risk of being caught. Never one to miss the opportunity to “bang-on” about enforcement but if this is impacting on road safety then we must target young drivers. This will undoubtedly provoke the usual claims of harassment and victimisation but enforcement will always attract this reaction.

    As always, let me give you a story. Young drivers are causing a safety hazard in Surrey by racing their expensive sports cars through the new Hindhead Tunnel.(Daily Telegraph, 2nd Sept, page 7, col 1) The cars are usually Lamborghinis, Ferraris and Aston Martins. I would send a few police motorcyclists to Hindhead to enforce the speed limit and, if they see any of the above makes being driven by a young person, stop them to check the driver’s insurance. Now,this will be called victimisation. I am harassing a certain age group from a social class defined by the quality of the cars they drive. Parents will surely instruct QCs to defend their fledgling’s high spirits. I call it enforcement. That is what the police are paid to do, it’s their job, and wouldn’t I just love my day in court.

    Roy Buchanan, Epsom
    Agree (0) | Disagree (0)

    Can a representative from the IAM please inform us where they obtained the quote provided in their article? Working with students who have purchased insurance they have not paid anywhere near that price.

    The car and details of the driver, have they passed are they a learner etc would also be useful.

    Stuart Howarth, Rochdale
    Agree (0) | Disagree (0)

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