GoCompare's research revealed low levels of understanding among young drivers when it comes to car insurance and what it covers
GoCompare says young drivers are “clueless” when it comes to understanding basic insurance terminology or what their policy actually covers.
The survey of 18 to 24-year-old drivers revealed less than half understood basic terms such as “no claims bonus” and “third party, fire and theft”.
It also found 65% buy a policy on price alone, and just 47% take time to check what they’re covered for and what they are committing to.
GoCompare founder and CEO Lee Griffin said: “Not only is it a legal requirement to hold insurance, but in the event of an accident it provides financial protection for vehicle damage and injuries to passengers, other drivers and pedestrians.
“Insurance policies differ wildly in the amount of cover they offer, so when arranging cover the price shouldn’t be the only factor you think about.
“It’s vitally important to pick a policy that suits your needs and personal circumstances — otherwise you could find yourself without cover when you need it most.”
According to GoCompare, while young drivers represent 7% of UK licence holders with car insurance and drive fewer miles than older motorists, 17 to 24 year olds have the highest casualty rate over distance travelled.
He continued: “Statistics show that young drivers are far more likely to be involved in an accident than drivers aged 25 and older, which is why they are likely to pay more for cover.
How can young drivers get a lower price on their car insurance?
According to Griffin, young drivers can reduce monthly premiums by increasing their out-of-pocket costs if they do make a claim.
“One option for young drivers looking to cut the cost of cover is to agree to a voluntary excess,” he said.
“This means they will have to pay more toward the cost of any future claims as the voluntary excess is added together with the compulsory excesses.
“Young drivers already have higher compulsory excesses than older, more experienced drivers, so if they’re aiming to save on their premium by opting for a voluntary excess — they need to make sure the total sum is affordable.
In a bid to remove this risk, GoCompare announced it will allow all car insurance customers, including young drivers, the opportunity to claim back some of their excess cost.
“To help cushion the financial blow of making a claim, customers arranging car insurance through our website can benefit from free excess cover,” Lee added.
“The offer applies to all drivers — no matter their age. Qualifying car insurance customers will be able to claim back up to £250 towards their excess if they need to make a claim.”