Extortionate increase in insurance after passing test

[Daisyhoney]

My son aged 19 passed his driving test recently - first time so really proud of him. But then came the kick in the teeth. He rang his insurance company to update them and (he had the phone on loud speaker) the man said and I quote ' it'll just be a little bit extra ' . How much extra ? my son asked only to be told £3002!!!
I thought I must have misheard but no that figure was correct and the monthly payments would go up by £350 per month 🥴
I feel so bad for him, he's done so well buying his first car and passing first time. I know he's now deemed as a higher risk but surely this just isn't fair on the youngsters. Why can't there be a cap on how much insurance companies can charge?

My son is insured with Tesco 'Insure the Box'.

He's had the policy for 3 years as a provisional young driver as he dithered with lessons and learning, then Covid put an extra 18 months on getting the actual test.

He actually passed this week and the premium only increased by £95 in total (which we were very surprised about).

Worth trying them?

He's insured fully comp. I'm definitely going to look into Tesco black box as several people have now mentioned it.

@Cantgetausername87

Theres a 14 day cooling off period as long as no claims made if you do find a better deal - its a legal requirement

Doesnt that apply to new polices? He's only made a change to an existing one, not sure it would count?

Definitely worth a try, OP.

For what it's worth - insurers don't pick premiums out of thin air.

They have complex formulas that tell them the potential risks of every combination of driver, car, area, job and more.

In most cases, damage or theft of the car is hardly even a consideration- it's what damage could be DONE with the car that's the issue.

It's almost always the potential power of the car and not the value that is the consideration for young drivers. The liability of your son injuring himself or others as a result of recklessness and inexperience is what insurers factor in ( not that he would, but their historical figures tell them this demographic has a higher chance).

Obviously there are people who are exceptions to the rule, n

50s insurance is £150 per year = low risk

80+ insurance is £500+ per year = higher risk

Teenager up to 21/25 high, high risk

He has 14 day cooling off period, but the insurance may charge an admin fee to cancel

Shop around on comparison sites

@PassTheDutchyUpYrLeftBackside

Definitely worth a try, OP.

For what it's worth - insurers don't pick premiums out of thin air.

They have complex formulas that tell them the potential risks of every combination of driver, car, area, job and more.

In most cases, damage or theft of the car is hardly even a consideration- it's what damage could be DONE with the car that's the issue.

It's almost always the potential power of the car and not the value that is the consideration for young drivers. The liability of your son injuring himself or others as a result of recklessness and inexperience is what insurers factor in ( not that he would, but their historical figures tell them this demographic has a higher chance).

Obviously there are people who are exceptions to the rule, n

I was going to post something similar. There is a bit of naivity on this thread about how car insurance works

And to the posters saying things like I'm with Tesco and it costs £900 like it's one price for everyone .

No one can possibly say whether there's a cheaper quote available but for sure you won't find out if you don't do the proper research. Hopefully cancelling won't be too costly if you do find a cheaper policy.

It sounds like you haven’t done an awful lot of research. By shopping around and putting you and your husband on the policy as named drivers he could probably bring it down a lot. Have a look on a price comparison site and play around with the variables.

Sadly, a lot of young lads drive like idiots, so the premiums are high for all. My son shopped around and looked at different cars, some cars are higher than others because of claim rates.
My son had a BMW 116i sports as a first car, £1200 per year fully comp at 17

I bought a wee turbo diesel Clio which was deemed the ‘hot hatch’ against my dad’s wishes as he felt it was too fast. He warned me if I bought it I would have to insure it in my own name.

The Clio wasn’t launched in the UK until 1991, the diesel was naturally aspirated, not turbo charged and made a whopping 63bhp. It was never a hot hatch in any way and at nearly 15 seconds 0-60 deathly slow even back then. I think your memory is playing tricks on you!

In our experience, having a black box fitted made a huge difference to the premiums. The one we had fitted in our sons' car didn't have time restrictions/curfew. They both quite liked the challenge of logging on and seeing how good their driving was and how it could improve.

@Daisyhoney, I think from your original post that your DS already had policy in force and has amended it but look at first year cancellation rates for policy - depending on how long he's had it, he may be charged a percentage of the policy premium anyway now for cancellation.
My DS is learning now and, knowing the insurance industry, I've looked into this a lot.
To get cover under £1000 for him, we needed to:-
Shop around a lot
Fit a black box (good idea anyway as gives them feedback on their driving)
Keep vehicle cc under 1000, smaller the better
Standard model only
put parent with good driving history as ADDITIONAL driver - not policy holder. Do not fall into the fronting trap.
Personally I'd tell him to sell the Corsa. I would not let my DS have one,as others have said, regardless of its engine, its the cheap boy racer car of choice.
Try specialist young driver insurance like Marmalade and Veygo. They also offer short term cover if its too expensive for an annual policy. Just make sure he only drives when covered...

I work as a business analyst for an insurance company. The way we build pricing models is we analyse the cost young drivers have to the company.
There are a lot of very complex algorithms and we don't just decide on a number from a simple excel spreadsheet. A LOT of advanced analytics goes into it.

It's that high because young male drivers cost that much to insurance companies.

@TheUndoingProject

It sounds like you haven’t done an awful lot of research. By shopping around and putting you and your husband on the policy as named drivers he could probably bring it down a lot. Have a look on a price comparison site and play around with the variables.

Firstly my son will be doing the shopping around as it's his insurance and secondly as I said previously I don't drive so only my dh could be put on the insurance. I started this thread to firstly vent about the massive price hike and secondly to get useful advice which thankfully most posters have been kind enough to give me. But thank you for your comment anyway

What I mean from my post is: trust me, as an analyst I try my hardest to give my company the LOWEST £ number they should charge clients - as we want to be competitive and get all the business

BUT we cannot lose money so we have to charge the rate that covers the business so the price charged is the lowest price we can go.

OP, what’s done is done now but tbh it was unwise of him not to check what the price would be once he passed his test before he actually passed the test.

I’m guessing this is a change to an existing policy and not a brand new policy in which case he sadly won’t have a cooling off period, but if it is a brand new policy then he will.

I used to work for an insurance company (ironic given I don’t drive,) and we regularly had calls from people, parents usually, who wanted to know A, what kind of car it was best to drive, and B, what the premium would be.

The advice we always gave was that it would need to be a low grouped car, we used to recommend the Fiat Brava at the time but that was about 25 years ago.

But with regards to your question on why premiums can’t be capped, you need to look at not only what the person is paying, but what they’re paying for. So if a 19 year old crashes his car into another car, or causes a pile-up, or damage to other property, if people are killed or seriously injured, then his insurance is liable for all of that.

The insurance companies aren’t responsible for how much money their clients have. If they want to spend less then they have to buy a lower grouped car.But it seems your son didn’t even look into that when he bought his car.

And young males are by far the highest risk.

I remember one memorable call from a potential customer wanting advice as to what kind of car to buy her son. She said that he was one of a group of 5 who were gradually passing their tests, and thus far 4 of them had been bought new cars as birthday presents by their parents. In the last six months, he had been to three of their funerals. All because they’d crashed their cars.

Any grandparents with a nice clean licence?
You have to try every possible scenario in the comparisons, making sure it's all legal ofc.
My DS had me and his grandad as additional drivers and by changing his occupation from shop assistant to greengrocer his premium dropped £150.
There is a comprehensive guide on MSE it'll save him hundreds.

You should have 14 days to cancel. Go to comparethemarket.com and find one cheaper then cancel the original.

My son was 18 when he got his first insurance and it was 995 with his dad on as a named driver but no black box. He's just renewed it for his 3rd year and it's down to 297.

AlternatvePerspective unfortunately yes it is an existing policy so I think he may have to either stick with it or cancel and take the hit on the cancellation charge.
He's a typical impatient 19 year old so bought the first affordable car he found because his instructor said it would be a good idea to get a car to practise in before his test and even though we told him to take his time, he thought he knew better.
I hope he learns a lesson from this.
The funeral thing is sad and it certainly gives food for thought.

They've told him it's an extra £3000 and that is only until the end of that policy so £150 in cancellation and admin is nothing in comparison.
www.moneysavingexpert.com/insurance/young-drivers/

OP I can't help wondering how he was able to just go ahead and OK the increase in the monthly cost of his policy, as how many people have an extra £350 per month to spare? Sorry, I know that's now what your post is about, but didn't he even pause to think about it and discuss with you?

@Suduko sorry I didn't know that made a difference thought it was a blanket thing for new drivers

I had this when DH finally learnt to drive - in his late 30s I might add. Just wait 6 months as he won't be classed as a new driver then

I had a "nice" car at the time - and was quoted a similar amount to put him on the insurance. The person I spoke to said just give it 6 months - he won't be classed as a new driver then....even though he won't have done ANY driving in that time and then you'll accepted and get a cheaper quote

Low and behind 6 months later I added him at about £350 a year I think it was

Ridiculous really since I would have said he was more of a danger having not driven in 6 months since passing his test than being insured the next day and be off driving 🤷‍♀️

Motorcycle insurance was changed too, due to the risk associated with young riders

I had no fear when I was young

Not many speed cameras

But I was relatively sensible & completed the advance rider course

I am one of the lucky ones to still be here

Tiggerwhocamefortea that's a good idea - I didn't even know this was an option. We'll definitely look into this thank you

DH car was far too powerful for DS to be insured on as a learner driver and I refused to give DS any practice in my Yaris. I just thought leave it to the professionals.

Lessons were 30 each so we decided he could have just lessons. He had 17 lessons in total and passed first time.

I always think giving lessons means dc could pick up poor habits from parents teaching.