The government is making plans to create an upper limit of £1,200 insurance cost for young drivers, but this could lead to insurance costs for other drivers increasing.
When a petition to reduce young person insurance received over 150,000 signatures, the government took notice and started to look at ways to keep costs down. The result is a plan to limit the insurance premium for young drivers to just £1,200. This, however, creates an uncertain future for everyone else as it’s expected that this could mean an increase in premiums where insurance companies would look to claw back the money they’re missing out on.
Drivers between the ages of 18 and 24 would benefit from the change as the majority of new drivers are now changed in the region of £2,000 per year whereas older drivers have an average insurance policy that barely reaches £500. The government believes that this is unfair and that young drivers should get some relief from the expensive insurance policies, but that could mean seeing the average policy for older drivers creeping up in order to soak up the loss.
There are suggestions that young drivers shouldn’t have to pay for Insurance Premium Tax (which is set to rise from 10 to 12 percent this year), instead of capping their insurance costs. This would, in effect, lower their overall payments while keeping other drivers’ insurance costs down as well.
“We have engaged insurers in this process, so that they can have confidence that additional measures will make a real difference that can be rewarded with lower premiums.”
The plans are not set in stone, so it’s possible that these changes may not go ahead after a review. This does spell uncertain times ahead for motorists though, especially with costs expected to rise now that the government has made changes to the way personal injury claims are handled.
Will young drivers end up paying less for their insurance while costs for other motorists rise? We'll have to wait and see.