Obtaining your licence is a rite of passage, and yet you’ll often end up with more expensive car insurance just for being the age you are! Understandably, this may feel a little unfair. Finding cheaper car insurance for under 25s can be a challenging proposition, especially when younger drivers are statistically more likely to be involved in road accidents than other demographics. Unfortunately the statistics see Aussie drivers under the age of 25 painted with the same higher liability brush, and as a result, are likely to experience higher insurance premiums.
With our helpful service in comparing a variety of comprehensive car insurance policies, young drivers can find a level of cover that is right for them.
The table below highlights the different types of insurance coverage.
| Type | Damage to your car | Damage to other people’s property (e.g. other cars) | Damage or loss caused by theft of your car | Injuries or death to other people in an accident |
| Compulsory Third Party (CTP) | No | No | No | Yes |
| Third Party property | No | Yes | No | No |
| Third party property, fire and theft | No | Yes | Yes | No |
| Comprehensive | Yes | Yes | Yes | No |
There are various factors that Australian insurance providers use to determine the cost of coverage for younger drivers. A recent review by the Australian Transport Safety Bureau (ATBS), found drivers under 25 years of age were at greater risk for the following reasons:
The report also found that young drivers in Victoria are almost four times more likely to be involved in a motor vehicle crash than more experienced drivers. To put figures into perspective, 19% of drivers in Victoria who were killed in accidents fell into the 18 to 25 age bracket, despite only representing 10% of Victorian licence holders.
In New South Wales, young drivers represent almost a quarter of annual road fatalities, despite making up only about 15% of all licence holders.
As of July 2017, young drivers in Queensland made up 27.5% of the road toll, with 39 fatalities recorded. In addition to these troubling figures, 805 Queenslanders under the age of 25 have been hospitalised as a result of a car accident in 2017.
Unfortunately for young men, statistics reveal that males are at greater risk of being involved in a car accident, particularly those which total the vehicle. 80% of motorists who die due to speeding are male, and one in three drivers involved in car accidents are males under the age of 25. Therefore, it is understandable why insurance premiums tend to be marginally higher for younger males.
Okay, so you’re young and it’s likely you’re going to be shelling out more on car insurance than older and more experienced drivers – but don’t despair, it’s not all doom and gloom! There is a specific course of action you can take to give yourself the best possible chance of reducing your premium, both in the short term and long term.
Some handy information and tips to consider when searching for cheaper car insurance when you are young:
Above all, developing a safe driving record (i.e. not claiming on your insurance) and maintaining a good driving history (i.e. no speeding or running red lights) are sure-fire ways of progressively lowering your insurance premiums long-term. If possible, take a defensive driving course and equip yourself with skills to handle accident scenarios.
Furthermore, it’s important to ensure you service your vehicle regularly, and to keep a close eye on your tyres.
There are cheaper insurance options like third party property with fire & theft, and these policies are considerably less expensive than comprehensive cover. However, third party insurance will not cover your own car in the event of an accident in most circumstances. You could end up losing the most valuable possession you own, or at the very least be left with a massive repair bill.
Comprehensive car insurance offers the highest degree of protection on the road. While it’s more expensive than Compulsory Third Party (CTP) cover, that doesn’t mean it’s unaffordable! Fill out a quote and compare comprehensive car insurance to find a reasonably priced policy that protects your car under any circumstance.
The insurance provider must be informed of any other person/s before driving the vehicle, and may add another person to the policy if required. Some insurance providers have hefty excesses for drivers under certain age brackets (25 and 30 are the most common), and if a driver were to be involved in an accident without being on the policy, the insurer may refuse to pay the claim. In short, it’s safest not to drive your parent’s car without insurance, or risk being heavily out of pocket.
As each insurance company states different terms and conditions on their policies, there are no specific promises of lowering premiums as you get older. It generally comes down to years of driving experience and a blemish-free record that helps lower the cost of premiums. With this in mind, it’s imperative to read and understand the fine print on your Product Disclosure Statement (PDS).
You can usually add another person onto an existing policy but the insurance company will need to acquire any relevant driving information about the added person. This information normally includes their age, gender, number of years they’ve held their licence (not including Learner’s), their driving claims and history. Adding another person to your policy may increase and change the details of your premium. Again, it’s wise to check the PDS before changing your current car insurance policy.
Most insurance providers don’t require you to list a learner driver on your policy until they receive their restricted (provisional) or unrestricted (open) licence. Learner drivers generally attract an excess (in addition to any other excess on your policy) if the driver at the time of an accident is a learner.
Compare the Market can help compare and find the best car insurance for young Australian drivers under 25 years of age. We’ve got your back. Simples.
Sources: https://www.moneysmart.gov.au/insurance/car-insurance/young-drivers
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