There are ways to cut your insurance premiums as a young driver, writes Neesa Moodley-Isaacs
Taking out motor insurance as a young driver can be very expensive, often making car ownership unaffordable. But there are ways to lower your risk and therefore your premiums.
Gari Dombo, the managing director for AFI, says insurance companies generally classify young drivers as high risk due to their lack of motoring experience, and this generally results in younger drivers being charged higher premiums.
The likelihood of a young, relatively inexperienced driver being involved in accidents is high owing to, among other factors, driving at speeds higher than the regulated limit and engaging in risky driving behaviour.
Experts also say a new driver is more likely to have an accident in the first year after passing their driving test than at any other time in their motoring lives.
How to improve your rating
Dombo says there are several ways young drivers can improve their chances of getting lower premiums:
»?Obtain a defensive driving course certificate or diploma. A defensive driving course improves your chances of being considered as a safer driver;
» Choose a vehicle with a lower power (lower kilowatts) motor. Higher powered vehicles are considered more dangerous, especially among young drivers;
»?Build up your own driving history and no-claims bonus by taking out an insurance policy in your own name. As you become more experienced with a proven good record, your rates will reduce as insurance companies are reassured;
»?Pay as you drive. If you take out a policy that limits your monthly mileage, this will lower your premium as the less time you spend on the road the less likely you’ll be involved in an accident;
»?Electing to pay a higher excess means a lower premium. However, if you choose to do this, make sure you can afford to pay out for the higher excess if you do have to make a claim; and
»?Enhance the security features of your car, and ensure your car is parked in a safe place at night.
Third party insurance
Not taking out insurance isn’t an option. If you damage another vehicle you could be faced with tens of thousands of rands of legal claims. Rather than face being completely uninsured as a young driver, you can take out third party insurance only.
If you are involved in an accident with another vehicle, and you are at fault, the third party insurance covers you for these costs.
While third party insurance is not the same as comprehensive insurance, it can give younger drivers peace of mind in the event of a collision with another driver and the premiums won’t necessarily break the bank.
A quick survey on insurance aggregator website, Hippo.co.za, reveals that a 24-year-old driver who has never been insured previously, can get third party insurance cover for a 2006 Hyundai Getz 1.6 HS for a monthly premium ranging between R87 and R93.76. Save for two insurers, all the quotes provided for an excess amount of R1?250 with insurers such as Budget, Auto & General, Virseker, AA Insurance, First for Women, Dial?Direct and Virgin Money.
The remaining two insurers that offered quotations were expensive by comparison. Standard Bank asked for a monthly premium of R126.44 for third party insurance with an excess of R5?000, while Regent Insurance quoted a monthly premium of R493.42 and a R2?500 excess.
Giving parents peace of mind
If, as a parent, you are considering taking out car insurance for your child, you could consider a product such as Discovery’s Vitality Drive, which monitors driving habits and offers a regular report back to the insured and the insurer.
Vitality Drive also offers a Young Adult Plan exclusively for drivers younger than 26. On the Young Adult plan, 25% of your premium is paid into a “rewards fund” and after six months, you can access this money.