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Is the price of insurance too high?

10:26 UK time, Saturday, 5 June 2010

Millions of parents are said to be breaking the law in order to save money on car insurance for their children. Should the cost of insurance be reduced?

Parents are claiming to be the main drivers on the policy, when in fact it is one of their children who is the main driver, or owner of the car. The practice, known as fronting, potentially offers large savings but could lead to prosecution.

Research by Co-operative Insurance found that 41% of parents are fronting policies at the moment. They said hard times may be forcing parents to try and save money on insurance but warned that if they do so illegally, the ultimate price could be prosecution.

Have you ever fronted an insurance policy for your child? Did you know it was illegal? Is the cost of insurance fair for young drivers? Should insurance costs reflect age, gender, occupation or other factors?

This debate is now closed. Thank you for sending your comments.


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  • Comment number 1.

    I'm surprised it's only 41% of parents to be honest - I thought they were all at it. This makes car insurance vastly more expensive for the rest of us who are stupid enough to be honest when buying car insurance.

  • Comment number 2.

    This needs to be investigated, is it merely an assumption that younger drivers are more of a risk or is there facts and REAL statistics to back it up?

    A lot of elderly drivers on the road give me the impression they shouldn't be driving, their reactions are not up to it. Why do the insurance companies choose to not pick up on this?

  • Comment number 3.

    At least the parents are getting insurance. What ever happened to the governments crackdown on uninsured drivers. Yet another attact on people who take responsibility and letting people who drive uninsured get away with it until they crash normally in to a honest motorist

  • Comment number 4.

    Its a loophole that has just gone unoticed over the years but encouraged.The Insurance companies have never turned down cover because business is business and when I worked for them years ago they openly used to encourage it to get new customers in years to come,it was better than paying for advertising and many stayed with the company that gave them the chance to be covered.The fact that a vehicle might be used more by the offspring than the policy holder didnt come into it. Now however there is a singular question on most applications which asks who will use the vehicle the most but its hidden away in a bunch of questions which are just tick boxes.I never had the chance to be on my dads policy because he couldnt drive but even if you look at the cost then and now for a driver starting out its just catch as catch can.The amounts insurers want to charge young drivers-who have passed a test under stricter conditions than ever before with tougher this and tougher that-is just a rip off.The very youngest drivers are probably better drivers than their elders.Its a sure sign the Tories are back in power-its time for rip off Britain again!

  • Comment number 5.

    Yes, of course motor insurance is too high. Not only for young drivers but mature drivers as well. All insurance firms are nothing but legitimate money launderers protected by government legislation.

  • Comment number 6.

    Ah. The insurance industry. Another one, like the banks, that needs urgent regulatory reform.

  • Comment number 7.

    It is not that the price of insurance is too high or too low, it is the lack of regulation over get out clauses that can catch people out. A firmer, simpler control regime word reduce the level of differentiation in the market and simplify for everyone exactly what they are buying. Competition between insurance companies can then be on a more equitable basis. It appears to me that the cheaper the insurance policy the more profitable the insurance company.

    Secondly there is also the lack of investigation into paying claims. It is often cheaper to pay the claim than to investigate it. A tougher control regime on paying out will reduce insurance fraud leading to a reduction in the cost of insurance policies.

  • Comment number 8.


    Insurance costs a lot, to be sure
    But if you’re not covered
    You’re exposed to the risk
    Of losing it all
    What a disaster

    It’s something you need
    But don’t really want,
    Paying for something
    You don’t want to use
    Unless there is trouble

    Is there an alternative?
    A cheaper solution
    You could pay for everything
    That happened to you
    If you can afford it.

    So basic insurance
    Is all that we need
    If it is compulsory
    Then what can we do?
    To be sure, to be sure

  • Comment number 9.

    I haven't done it, mostly because I did know it was illegal, but what can you expect when policy costs are so extortionate?
    To have my daughter on my insurance, when she was learning and only had a provisional license, cost an extra £650pa - steep enough you'd think
    But, quotes for when she passes are all around £2000 or more!
    And, very few insurers take any account of the amount of time she has been driving (accident free) before passing her test.

  • Comment number 10.

    Of course they're too high, I'm 17, drive a 1.1l Fiat Cinquecento and the cheapest quote I could find was around £2300, from Quinn, which was the only company to offer so called cheap insurance for new drivers. Since then Quinn has gone into administration leaving the other companies able to raise their prices. It's a disgrace and must be stopped by the FSA. Essentially the insurance companies are making a massive profit from the people in society with no voice, the youth.

  • Comment number 11.

    Yes, it's far too high. I'm 20, male, with no points, never had a crash in my life and only drive a 1.4 new style Fiesta, albeit with a couple of mods but these aren't declared on my insurance. I have to pay £150p/m for fully comp with a £0 excess (this was the cheapest i could get from all insurance companys).

    However, switch that insurance quote to my girlfriend who has been driving only a short while, same age and no crashes/points and it drops to a mere £40p/m.

    Thankfully i have a job where i earn enough to support this and pay off the finance at the same time, some people aren't so lucky and have to resort to 'fronting'.

  • Comment number 12.

    Until today, didn't know this went on. Very worrying, and more dangerous than no car insurance at all. Currently, the police can identify from your number plate, whether you are 'legal'.

    If a driver under such 'front' insurance caused an accident to me, or my family, we would have no redress, as the offender's 'insurance' would be invalid.

    In fact this is a more serious crime than no insurance, because the police are unable to protect those with insurance. Therefore, parents must be prosecuted more severely than their children due to 'collaboration' or 'intent' of criminal fraud?

    Car insurance has always been high for new/young drivers. That's how insurance works - the short journey always pays for the long journey. My first policy cost more than the car I was driving, but needed the car to get to work on shifts, plus built up my own 'no claims' bonus because I was 'forced' financially to consider how I drove - that's the point!

  • Comment number 13.

    Is it really worth bending your agreement with the Insurance Company, when you could stand to lose a lot more than you save! The prospects are that you may well be committing a serious criminal offence - never mind a road traffic offence! If there is an accident, regardless of who is to blame, you may personally have to foot the bill!

    Your Insurance premium is based upon the Insurer risk assessment of you: your age, your driving experience, any driving convictions, the nature of the use of the car, and a few other factors. You bend that agreement and that risk for the Insurer increases - leaving all of us to foot the bill. So do not be surprised if a Neighbour, Friend, or even Member of your Family says something which causes the Insurance Company to refuse to insure you.

    It is, therefore, a silly thing to do as those who do it only eventually increase their own premiums.
    Fiddling Car Insurance is not a Victimless crime - The Victim is often the very person who fails to keep to their agreement with the Insurance Company. These Companies are not awash with surplus cash - contrary to popular belief!

    Lastly why should I pay the Insurance Premium, through increased premiums on my Insurance, because you want to let your Son/Daughter/whoever drive a vehicle?

  • Comment number 14.

    Where are these young people going for insurance if its costing them £4,000?! My first car was a 10 year old 1.0 fiesta, that I got on my 18th birthday and it cost me £750 to insure third party. That cost steadily decreased each year until I reached around 8 years no claims. Young drivers either need to shop around more or lower their car specs!

  • Comment number 15.

    In this country we don't take car insurgence related crime seriously enough. So the consequence is more and more people simply don't bother with it because they know the penalty is less than a slap on the hand. I saw somewhere that repeat violators get find about £68 each time; well for me, I'd need to be caught 8 times a year before I'd be better off buying insurance for my (high performance) car. Then of cause there are the foreigners driving around without insurance, nothing gets done to those people.

  • Comment number 16.

    I'm not surprised this is happening.
    I think that insurance premiums seriously need to be reviewed. My brother passed his test three months ago, has his first little car (1.3l Fiesta) and the cheapest insurance quote he obtained was £2400. Why so expensive? This is several times what the car is worth, and my brother spent a long time learning to drive, ensuring that he was safe and competant on the roads.
    The only way I was able to reduce my first insurance premium was to add my Mum to my policy as a named driver, which took £200 off the total.

    I see plenty of 'experienced' drivers who make me wonder how on Earth they passed their test in the first place. I would go so far as to say that these divers have become complacent in their driving abilities and actually the standard is pretty poor.

    Sometimes, I think that insurance companies bump up premiums simply because they can. Drivers have to buy insurance, and they get away with astronomical prices because the insurance is a necessity.

  • Comment number 17.

    Of cause insurance is to high it is a legal rip off. We were told insurance had to go up because of GTI's (hot hatches) being stolen. Then we were told that insurance had to go up because of joy riding. Traffic calming along with higher premiums were introduced and never reduced as the theft and joyriding has diminished.

    We are forced into having insurance and a lot of people pay far more than their vehicle is worth. Earlier this year we were told that because of the crash, more people are driving without insurance prompting a rise in everyones premium. Again these rises never seem to diminish when the problem subsides.

    I often wonder if we had no insurance would our driving habits change and make us drive more careful. Probably!

  • Comment number 18.

    All new drivers should start with 100% No-claims discount. That would encourage youngsters to to care to keep it.
    In any event, insurance is rediculously expensive. I would like to see a state insurance like they have in Canada.

  • Comment number 19.

    Children shouldn't be driving. Take the bus or a bike. I'm especially annoyed at the gall of students who say they don't have enough money but do own a car. And why the heck are parents paying for this? If the kid is "grown up" enough to drive a car, he/she can pay for it him/herself!

  • Comment number 20.

    Insurance is expensive - but if there were less claims it would be a lot cheaper!

    What I find really disgusting is that the government levies a tax on the premiums we pay.

    How many risk not taking travel insurance because of the cost - I think this attracts 17.5% Inurance Premium Tax. The huge cost of car insurance (and the miserly penalty for not being insured) puts many honest citizens at risk. My wife was hit by an uninsured driver - it cost us over £800 with no realistic means of recovering this money. The police weren't interested either.

    The whole insurance business needs an inquiry - including the governments part in it (even if it just their fat sticky fingers).

  • Comment number 21.

    There is no "right" to drive a car, they have to pay the appropriate costs involved. May be they like motorbikes they can introduce lower power lower cost cars, or options around monitoring usage by GPS and or regular drug/alcohol testing for younger drivers - but they could always use public transport, bikes or their own feet. Why should the rest of us have to pay extra to cover for others being uninsured or not appropriately insured.

  • Comment number 22.

    16. HBMoose wrote: "My brother passed his test three months ago, has his first little car (1.3l Fiesta) and the cheapest insurance quote he obtained was £2400. Why so expensive? This is several times what the car is worth, "

    £2,400 is a very very tiny fraction of what my life or the life of my wife is worth. You might say that by underwriting the risk of a driver who has yet to prove themselves the insurance comany is underwriting a huge financial risk - not just the value of your brother's little fiesta. £2,400 per year might be considered cheap in the light of this!

  • Comment number 23.

    When I was younger my dad put me on his insurance, I had no idea this is illegal.
    Now I live in Sweden i don't have to worry, the insurance companies are great.
    It's the car that gets insured not the person, so I can drive someone elses car if I need to. I once had a little crash, and didnt have to pay anything since the car in question had been insured for a few years with no claims at all.
    The UK is a rip off!!

  • Comment number 24.

    I think if people who have just passed their test, as well as everyone under 21 were capped on the size of engine in a car they were allowed to drive, then maybe something could be done about excessive premiums.

  • Comment number 25.

    One solution to uninsured drivers - insure the CAR for the third party element of the insurance not the driver. Any car with no insurance should be impounded and crushed without appeal.

    When my wife was hit by an uninsured driver, a different driver was insured for the vehicle that hit her. This meant that the ininsured driver would not be detected by the police ANPR system because their database showed that there was an policy registered agaist the car registration. This is an easy ploy to defeat ANPR.

    So 3rd party covering the vehicle, fully comp as an additional increment covering an individual driving a car. This might make insurance more affordable and will reduce the number of vehicles driving uninsured.

  • Comment number 26.

    Maybe if people didn't claim thousands every time they have a bump then the cost of insurance will go down.

  • Comment number 27.

    Don't you love modern parents? Is it any wonder so many kids are growing up without knowing the value of anything?

  • Comment number 28.

    Pb (post 22). I like the way you excluded the part about my brother ensuring that he was safe and competant to drive. I know that there is no price on a life. My point was that there are plenty of older, experienced drivers whose standards of driving are awful, and younger drivers should not have to pay through the roof, taking all the blame for accidents and risk. Take my neighbour, for example... in her fifties, crashed into her own house whilst speeding. Idiotic.

    At least my brother is insured, and paying for his own policy by having a job (having spent three years hunting for one; perhaps this is why parents are fronting policies?).

    I'm sure many people here started learning to drive as soon as they were old enough to. Perhaps if insurance premiums were a little cheaper and the whole system better regulated, drivers would be more inclined to invest in insurance, therefore reducing the amount of uninsured drivers and parents fronting policies. Or perhaps I am just deluded.
    Also, plenty of insurers now give the opportunity for named drivers to accrue no-claims bonuses too.

  • Comment number 29.

    When I went to University back in the late 70's early 80's I worked a a fork lift truck driver during the holidays and bought an old but relatively sporty car.

    The fully comprehensive insurance on this was around £180 per year about £1500 pounds in today's money.

    A quick search engine search reveals the actual cost now for GOlF SE is approximately 25% more in real terms for a claim free 18 year old who has held a driving licence for a year.

    However, a similar car can be insured with parent as owner and child as named driver for around £500 with a perfectly servicable car available for £1000 you could afford to throw this away every 9 months and still save money !

  • Comment number 30.

    People here seem to missing the point. It is not how much your car is worth, it is the damage you can do with it and figures show that people under 25 have a much higher rate of accidents than any other age group.
    My son was involved in a serious accident. He got £18,000 for his injuries and had to change his job. His solictor in access of £50,000 and the vehcile involved was worth about £3,000. Young drivers should be restricted to cars under 1000cc and have the top speed regulated. It would save lives.

  • Comment number 31.

    Like everything else in the UK that is supposed to be 'regulated' it's all down to company greed.

  • Comment number 32.


  • Comment number 33.

    "The car insurance companys in the U.K. {Cherry pick they customers} because they is no law against this scam , you must have insurance its the law , young and old people have a very bad deal !! and they all know this? if you buy any insurance thats not fully comp, you are wasting your money, if you have an accident or your car is stolen you lose your no claims bonus for a start I think insurance companys are crooks' in the U.K. {Read the small print on your policy excess for this and that non comp, insurance is worthless in many cases'} I found out the hard way.

  • Comment number 34.

    I'm CONFUSED. I suggest that parents go COMPARE THE MARKET for cheaper car insurance.


  • Comment number 35.

    Remember - a 'named driver' (your child) on your car insurance is legal and welcome. BUT NOT THE SAME as 'FRONTING' which is a 'pre-meditated', 'complicit/fraudulent criminal law offence -

    - and will equally destroy lives of those 'legal' involved in an accident with anyone with no insurance at all? In fact, it's worse than no insurance at all - it is growing to avoid police detection and is used heavily by criminal gangs.

    Perhaps our PM David Cameron, will enable police to crack down on this and foreign plates too?

  • Comment number 36.

    Whilst we all moan about the cost of the insurance, we have to remember that the insurance companies at the end of the day have to make a profit, If they didn't, no one would be offering insurance.
    The truth is that despite how good a driver we are we can all have accidents. Sometimes they may be your fault, but sometimes they aren't.
    If you do have an accident you will be pleased you have insurance. My wife had an accident in the snow in January, which must have cost over £6k. She was driving sensibly, but the road had not been gritted and the car spun into a crash barrier and the whole of the front of the car had to be replaced. As well as the repair costs, she had to have the car towed to the repairers, had to pay for damage to two other cars that had a minor corrision trying to avoid her, had a hire car for two weeks, and then also received a bill from the council for repair to the crash barrier, which was for well over £1k.
    In regard to risks the insurance premiums do take the statistical risk into account. Young people are statistically more likely to have an accident. If any insurer thought otherwise they would be able to corner that part of the market by offering lower premiums, however they all know they would end up losing money.

  • Comment number 37.

    When I worked for a major insurance company, brokers were advised to avoid insuring drivers under a certain age, preferring low-risk older drivers. I am still fronting my son's insurance because he is still under 35. Yes, 35!

  • Comment number 38.

    There is a simple answer to all of this. We frequently hear the press bemoaning the costs of the public services-few realise that in fact the Insurance industry is also funded by the public purse-to whit the Law requiring that we will have third party insurance and not making it an in house Government department. I have been driving for nearly forty years now and have always been infuriated by the fact that insurance companies can rip us off BY LAW. I am not surprised that people lie to the insurance companies because they always rip us off anyway. Consider this; You apply for Cover and they ask you how much your car is worth. Whats the issue? They are not going to pay you what your car is worth, they are going to pay out what the cartel of insurance companies agree your car is worth-hence Glass's guide which is not freely available to the average motorist.

    The chances of the Hospital actually requiring the Insurer to pay up on the third party insurance is remote-so its not the insurers paying for accidents- its the NHS! Why because as a Brit and a tax payer you would be treated at the point of demand anyway. True answer to defeating this cartel will never be contemplated by Parliament because of vested interest. That is to have the road tax as the third party insurance (since the road tax no longer goes to pay for the roads) and to let the insurance companies fight for any other business and see how the cookie crumbles then. So that's it then the Insurance industry Assures it profits not your interest. Oh and by the way it is largely paid for by tax payers, by virtue of the fact that the law says you must pay.

  • Comment number 39.

    This been going on for a long time.
    My dad got me my first car when I passed my driving test at 17, (12 years ago) he also put it in his name (saves more money), put me on as just a driver it saved near £1500. All my mates done it. We all knew it was illegal. Many of the police in our area knew it went on, but didn't seem to bother about it. Never had a claim or involved in any accident so don't know how things would have worked out if that did happen, but I think all would have been fine, my insurance company would have had to prove that I was the main driver, not my dad. I think?
    This 'fronting' is going to continue, prices were high back then and much higher now.
    Pass Plus helps little.
    We need to find a way to split the 'safe sensible new young drivers' from the 'young driver that should not even be allowed a licence'. Start them all from a sensible premium, if a young driver gets speeding points etc, heavily increase their premium. And if young driver gets no points or accidents etc, they keep their low premium or get heavily reduced premium. Something like that. Need to make the insurance for young drivers much fairer.

  • Comment number 40.

    Anybody who falsifies an insurance declaration to secure a lower premium should be ashamed of themselves, and deserves all they get when caught out for lying.

    What with youngsters driving on drugs or alcohol as well, racing around towns at night (where are they in the day?) to impress and prove themselves, all motor policies that have anyone under 25 years of age need to have loaded premiums. I reckon another 50% would be about right, as most so-called accidents (incidents in reality) are caused by reckless youths, and they and their deceitful parents should foot the lot.

    Careful drivers, with no blemishes on their motoring record, are continually paying for others' stupidity. Insurers should load premiums on every policy that names children as other drivers and, if that doesn't make the parents think twice, should load them 25% every year.

  • Comment number 41.

    Yes it is too high, its a legal requirement to have it so insurers can charge what they like. Its made even more expensive by the amount of brokers and middlemen involved all the time, just watch TV for 5 minutes and see how many ads there are for car insurance.
    Penalties on uninsured drivers should be higher to reduce the risks for insurers of law abiding drivers.

  • Comment number 42.

    How about raising the price of car tax to include basic 3rd party insurance so that every vehicle that has tax also automatically has insurance? Per-vehicle (as opposed to per-person) insurance seems to work okay in other countries.

    Then people could go to insurance companies for any requirements they have above and beyond the basic 3rd party insurance covered by the tax.

  • Comment number 43.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 44.

    Even those of us with full no claims bonus and 30+ years of experience are getting heavily penalized..but I found when checking out the facts that the amount paid out in motorists claims against final end of year company profits it was clear that the motorists were not to blame at all but purely excessive company greed.

    And in my opinion it is that alone which is forcing a lot of people to take the chance and drive without insurance.

  • Comment number 45.

    31. At 1:06pm on 05 Jun 2010, Xantal wrote:

    Like everything else in the UK that is supposed to be 'regulated' it's all down to company greed.

    What? "Millions of parents are said to be breaking the law in order to save money on car insurance for their children", so how would "regulation" stop that?

  • Comment number 46.

    Diana_France wrote: I am still fronting my son's insurance because he is still under 35. Yes, 35!

    More fool you when you get caught. Perhaps then you might be able to teach your child the true value of something?

  • Comment number 47.

    34. At 1:15pm on 05 Jun 2010, Keith wrote:

    I'm CONFUSED. I suggest that parents go COMPARE THE MARKET for cheaper car insurance.


    They're too stupid, as they went to compare the meerkat dot com instead.

  • Comment number 48.

    The reason why people 'break the law' on insurance is due to the cost. My daughter has just been quoted an increase of £1,000 to insure her daughter, who admittedly is a learner.

    Just as an added thought, as I understand it, the high cost is due to the lack of experience. Yet it is not learner drivers who pass me at over 80 mph on the motorway, and fail to use any signals. Or theory weave in and out of traffic, again, without signals, or maybe chatting on the telephone whist driving one handed.

  • Comment number 49.

    Motor insurance is not too high. It is a very competitive market (I recently saved nearly £400 per year by switching insurer) and I guess for young people it just costs what it costs. As a young man , I drove my Triumph Spitfire for seven years on Third Party , Fire & Theft because , even on a City salary, I couldn't afford Comprehensive. I think it made me a better driver knowing that one crash equals no car.

    I agree with those who say that old people are a danger on the roads along with "Boy Racer" & "Tailgating Van Man". Insurance companies need to be much more specific in how they calculate premiums.

  • Comment number 50.

    Is the price of insurance too high?

    Another stupid question by the BBC? Of course the premiums are too high. Insurance companies are there to make money, not give it away, and that means ripping people off.

  • Comment number 51.

    if the law is the will of the people and the people decide there is no law then the people will have no will.
    and yes let the people decide what price food?
    and yes let the people decide the price of insurance?
    and yes let the people decide the cost of fuel?
    does it make sense?

  • Comment number 52.

    Insurance in general is expensive. For something that you're required by law to have it's especially galling.

  • Comment number 53.

    One of the comments mentioned how insurers "write off"cars instead of repairing. Its outrageous for some write offs-just check whats on offer on Ebay.Some of the write offs merely have an odd scratch-but are perfectly road worthy.Thats why premiums are so high.To write off a vehicle is the easy option and of course its an excuse for the insurers to rack up premiums.All policyholders pay the price for the inability of government to get 1million plus drivers to actually get some cover.All the silly laws and checks always catch the honest not the dishonest and they are the ones who pay through the nose.The easiest way to bring the cost of cover down for everyone is to have basic third party cover built in to excise duty and if you then wanted better cover you paid for it yourself.It would then ensure ALL young drivers were covered and encourage a bigger take up of proper comprehensive insurance.But of course thats too simple isnt it?There is no scams to be made out of such an honest solution to a growing problem.

  • Comment number 54.

    40# there is the little issue of morality, it seems that you don't think that rip off Britain is a moral problem. If you treat people fairly- you gain respect. If you rip them off, whats the difference between them and the Sherriff of Nottingham or Henry the Vii tax advisor Henry Morton. His principle was if you can afford to pay , you can afford to pay some more. This country and successive governments have made cars essential and written a blank cheque for the insurers. You need a car- hence you CAN PAY. This is essentially a travesty and a disgrace. Next to Bankers, Insurers rate very low. All thieves the lot of them.

  • Comment number 55.

    It is FRAUD, plain and simple - prosecute every one of them!

  • Comment number 56.

    When I first started driving at the age of 19 (22 years ago) my first car was a 12 year old MKII Ford Escort, the cost of insuring it was £220 per year for third party fire and theft cover. I had the car for three years with no accidents by which time the premium had actually dropped to £175. It would seem that younger drivers today are disproportionately penalised by the insurance companies, I don't imagine that young drivers nowadays are any worse than they were 20 years ago, in fact the driving test is even more stringent today than it was then.

  • Comment number 57.

    I think we should be very wary of ever transferring control of a private entity to the government through the use of regulations. We as the general public can vote for our favourite companies and in so doing bring market pressures to bear. The unpopular insurance guys will lose revenue and go out of business.

    Now, if in the meantime you've given government the power of regulation, how do you vote a regulation out? You've now lost a real measure of control over your own power to choose. Let me repeat this very important point: governments are only useful to perform a very few things (e.g. defence) because by its nature it is inept. It should always be kept as tiny as possible and submissive to individual action.

  • Comment number 58.

    50% of the fee paid to insurers is actually taxes, which is why the governmnet care so much. Gordon Brown added it during hs tenure as Chancellor (It started of small, Gordon changed that).

    I am sure the government could reduce it, if it causing people to skimp out on the insurance.If fewer people are paying it, the government won't be making as much anyway. A reduction that persuades more people to pay for it, would also mean that more taxes get paid of a smaller amount. Do the maths right and it doesn't have to change government funding.

  • Comment number 59.

    The price of insurance for younger drivers is ridiculous. Whilst insurance companies state that the price reflects the risk I recently had reason to wonder if they don't just make up the numbers as they go along.

    My 2o year old daughter waas paying £1,700 per annum insurance on an N registered Rover Metro. For her 21st I wanted to buy her a better car as the one she has at present does not have many safety features and does not have power steering. She had budgeted slightly more for insurance but we found that the insurance company wanted nearly twice the amount for a car of the same engine capacity that was safer to drive. It was simply unaffordable.

    She is basically being forced to drive an older, more dangerous. car as she cannot afford to stump up the extra premium the insurance comapany wants as its cut of her perceived wealth

    No wonder so many young drivers bend the law or go uninsured.

  • Comment number 60.

    And I've always seen charging different amount for different genders, races and ages as DISCRIMINATION.

    These are factors out of your control, and your are being judged according to the behavour of people in your "gender/race/age group", even though there's no factual evidence that you behave anything like them.

    By all means, you can charge based on the class of car, the location I live, and how many miles I drive. These are factors I CAN control.

    Maybe something should be done about abolishing the discrimination and introduce capped "frequent claim multipliers" to counter act the no claim bonuses, so that the riskier drivers still do pay more.

  • Comment number 61.

    Let us be clear. The first objective of any insurance company is to make money. Second, they will attempt to avoid paying out to any claimant if at all possible. That is the nature and culture of their business. Is it surprising therefore that some people will seek ways of minimising the amount they have to pay in premiums to Insurance companies. I do not think so.

  • Comment number 62.

    Octopus - PR Agent for the Establishment wrote:

    Yes, it's far too high. I'm 20, male, with no points, never had a crash in my life and only drive a 1.4 new style Fiesta, albeit with a couple of mods but these aren't declared on my insurance. I have to pay £150p/m for fully comp with a £0 excess (this was the cheapest i could get from all insurance companys)

    More fool you. By not declaring the mods you will find, in the event of a claim, you aren't insured. You are paying £150 a month for nothing.

  • Comment number 63.

    Car insurance for young drivers IS very expensive. However, being a young driver, I can see why. A good half of my friends have been involved in accidents in their first 2 years, and those who are honest and don't get their parents to front them end up paying maybe 3 or 4 times as much.

    My parent is the main driver on the car I use, legally, as I use the car perhaps 6 weeks a year, and she the rest, but I would bet that if I ever had an accident, the insurers would make it very hard for us to prove that it was the case.

    The biggest annoyance is that un-insured drivers caught at the roadside end up paying fines which are pathetic compared to a years policy.

    I say find the most expensive policy going for that car, driver and circumstances, and quadruple it, to be paid within 14 days.

    As it works out, being completely uninsured, whilst illegal (and I do not condone it in any way) actually is probably the best financial solution- that is something that needs to change, as it is the honest folk that are footing the bills of these criminals.

    The other problem is that for most young drivers, their car is the first freedom they ever experience, due to being wrapped up in cotton wool due to the H&S crowd. Who can blame them for wanting to test out the limits of that freedom? This country needs to start giving, and making people take responsibility for their actions, from a much younger age. I was lucky, and had trusting parents who gave me responsibility. Some of my peers were not, and it shows.

  • Comment number 64.

    Whaaat? It would never have occured to us to do this. Initially we paid for our daughter to be insured to drive my husband's car. We then helped her to buy a car on the basis that the sooner she had her own car and her own insurance (at a whacking cost and she is paying for it herself but gets a discount for paying a whole year upfront!) the sooner her premiums would go down.

    What happens when these parents stop pretending to be the car owners and the kids have to get their own insurance from scratch?

  • Comment number 65.

    All insurance is too high, unless you're a serial cliamant & lets face where does the money, for the amounts that are paid in far outweigh anything thats paid out. The simple answer is into insurance executives garages and bank accounts as their huge perks as recompense for telling us our endowments are worth less than we've paid in

  • Comment number 66.

    6. At 11:30am on 05 Jun 2010, take_action wrote:
    Ah. The insurance industry. Another one, like the banks, that needs urgent regulatory reform.


    Your quite right ANY kind of Insurance is a total Rip-Off whereby it is ALWAYS the Insurance Companies that make the most Money in this racket, for when was it the last time we saw a "Poor" Insurance Company having to put its prices up because they were making a LOST on something, and anyway those in the Insurance game are earning far in excess of what they are worth in terms of Working Hard for YOU.

  • Comment number 67.

    naybe if the police started acxtually enforcing the law, the CPS actually prosecute the cases and the judges giving harsher sentences, such crimes would actually reduce. Sadly the police seem to be incompetent at catching these insurance evaders. Its not difficult to identify them .

    My insurance is funding these criminals.

  • Comment number 68.

    57. At 3:09pm on 05 Jun 2010, Ollathair wrote:
    I think we should be very wary of ever transferring control of a private entity to the government through the use of regulations. We as the general public can vote for our favourite companies and in so doing bring market pressures to bear. The unpopular insurance guys will lose revenue and go out of business.

    You are looking at business Fronts. There's plenty of outlets with different names, logos, advertising styles, focused on particular areas of the market.

    Most of these insurance companies are probably owned by a collective handful of companies. Based on my experiences on claiming from a couple of them, is that they probably all use the same underwriters anyway.

    The choice is really very limited.

  • Comment number 69.

    Back in 1992, my brother wanted to buy a car. He was 18, had passed his driving test, but had to apply on his own, because noone in the family owned a car for him to piggy-back on their insurance. He was quoted over 1000 pounds a year to insure a car that cost less than that, and even then, would not replace his vehicle.

  • Comment number 70.

    In America it is. I pay about $1000 a year to insure a car that may not even be worth that in the end. Bare-bones health insurance costs $150 a month. For a renter, insurance costs about $130 a year. To me it is a waste of money - I don't like paying money for something that isn't really tangible. If economic times get harder for me, I will just get rid of the insurance altogether.

  • Comment number 71.

    I think ALL untaxed cars should be off the road, you cannot get an MOT without insurance so how are these young mainly male drivers doing on the road? I watched a programme the other night and they were being disqualified from driving for 18 months even though they haven't even got a licence - what is the point in that?

    I have a 19 year old son at uni but we cannot afford the £2,000+ insurance on my husband's car to be able to let him learn. One day hopefully he'll be able to afford his own but how does he get a job if he cannot drive? They are not on the doorstep like they used to be. Fortunately at the moment he's not too bothered about learning but lessons and the price of the test etc is shooting up and I fear he'll never get the chance.

    Why club together all under 25 year olds? They are not all idiots, some are very sensible indeed but are not able to prove it because the minority spoil it for others.

  • Comment number 72.

    Young male drivers consistently have more dangerous crashes than young female drivers. Other high risk groups are the elderly - and widows. These because their senses are deteriorating, or their husband did all the driving. But their accidents are mostly low speed. We could have a flat rate insurance policy - everyone pays the same - but you would need all insurnace companies to sign up to it because no sane company wants to end up paying for the high risk drivers.
    Where are the postees prepared to admit that when they were 18/19 they were not particualry safe drivers, used to show off, sometimes drink and drove, drove too fast at times for the conditions... It wasn't just me out there driving like that.

  • Comment number 73.

    "Research by Co-operative Insurance found that 41% of parents are fronting policies at the moment."

    Does this 41% of parents include those with one babe in arms and those whose children are now retired,or just those with children under 21, or those with children under 25? Is this about all parents or only those who insure with the Co-op? What does the Co-op stand to gain from this? When will journalists understand statistics?

  • Comment number 74.

    If insurers aren't allowed to make assumptions on general habits, will the applicants admit their failings when applying for insurance? What do you think?

  • Comment number 75.

    Many are driving on undetectable drugs. Young drivers generally drive too fast.
    It may be a generalisation but that's how insurance has to work - you can't investigate everyone to the extent where you might uncover the exceptions who deserve cheaper insurance, because... the cost of doing so would drive premiums through the roof.

    It's the price they pay for the age of irresponsibility.

    Things are probably moving towards the time when most people will start driving at 25 having held a provisional licence for 8 years - and that may not be a bad thing.

  • Comment number 76.

    Surely it is discrimination to charge an 18 year old man ridiculous amounts of money for car insurance.

  • Comment number 77.

    Fronting will continue because it's impossible to prove that the policyholder is doing it.

    Scenario 1: I buy a second car and insure it. I add my son to the insurance and let him drive it occasionally.

    Scenario 2: My son buys a car, but we put in in my name. I insure it and add him to the insurance. He is the only driver.

    How can any company or law enforcement official ever determine the difference between these situations? Unless all drivers on all journeys are somehow logged electronically, there is no way to know.

    The reason insurance costs so much for everyone is because of lawyers - that well known root of all evil. I hit a car at 5mph earlier in the year - everyone was fine and there was a dent in the other car's bumper. But a few weeks later, it transpired that the other driver had a "stiff neck" and "complained of headaches". So they'll be getting a few thousand for their "injuries". All down to no-win no-fee lawyers.

  • Comment number 78.

    6. At 11:30am on 05 Jun 2010, take_action wrote:

    Ah. The insurance industry. Another one, like the banks, that needs urgent regulatory reform.

    So - that would be the FSA - the regulatory body that looks after all financial industries, inclduing Insurance, then. Which I believe is exactly what's needed. Well done. Not sure what your point is, though.

    Thing is, what with the core principle of contract law, under which Insurance operates, being one of 'Good Faith' (i.e the insurance company will ask the customer to tell the truth and let them know that their insurance is inoperable if they do not) I fail to see quite how your comment makes any sense at all.

    The Insurance Industry, and the Banking Industry, could both be regulated into the ground - which doesn't help a bit if people are telling porkies.

    Regulation won't help with this problem. Legal crackdowns might help, but regulating the Insurance Indsutry won't help at all. Premiums might even go up, because more complex rating processes and underwriting might push up the cost to the insurer of setting up a policy - let's not forget here, these guys aren't selling you insurance to be your friend, it's about profitability, like most things. Plus, they need the reserve so that they pay the claims.

    Thus, those who pay properly for their insurance lose out and a vicious circle is created whereby people tell fibs to get stuff cheaper.

    It would be much better if, instead of harping on about the big evil Insurer to direct your glib and pseudo-profound judgements at the liars who are committing the offence and causing the issue for legally insured drivers in the first place. Just a thought.

  • Comment number 79.

    Motor insurance is priced about right. Young drivers are inexperienced and highly hormonal.
    They present the vast majority of the risk and cause the worst accidents in their attempts to impress the rest of the world.
    For the rest of us, insurance can be cheap. Buy an old car and don't drive far. A limited mileage policy can save you a lot. I have a very old car, do less that 3000 miles a year, and pay less than £60 a year fully comp.

  • Comment number 80.

    No, it is not too high. Unfortunately the insurers often end up paying out where there has been an accident but the driver responsible is not insured - my husband has been involved with one of those, but because no one was hurt, the police, although called, did not get involved, nor apparently did they prosecute the other driver, and my husband's insurance company was the one which footed the bill for the repairs to his car, plus he had to pay the excess (fortunately his no claims bonus was protected). Presumably this would also have applied had it turned out that a teenager was driving a car with the main named insurer being one of their parents when this was not the case, and their insurance would have been invalidated?

    It is the people without valid insurance who are pushing the cost up - they need to be dealt with accordingly, with every case being prosecuted and the car scrapped.

  • Comment number 81.

    Yes. The price of young peoples motoring insurance is a cynical rip off on behalf of the insurance industry who know that parents will be paying for it and don't give a damn about less well off people. Lets get this straight, we pay insurance into a combined fund in order to cover all sorts of different risks. The insurance industry has taken upon itself the redefinition of this to mean that everybody pays in order to assure the common pool of risks - except where they can identify higher risks and therefore charge huge premiums because its just a small group of people, and no one gives a monkeys about a small group of people. This is wrong, insurance is supposed to insure against risk, not to be a way of finding people who you can screw the most money out of. Businesses are supposed to provide products into the market and to make a profit but society does not appreciate businesses which seek any opportunity whatsoever to seek out portions of society to discriminate against and to screw money out of for no social benefit whatsoever. We could of course discuss exactly what payouts these insurance companies are making against the claims made against them, it seems fairly likely that there is rather too much of a cosy business going on between the repair industry and the insurance industry, overpricing the cost of repairs.

  • Comment number 82.

    58. At 3:26pm on 05 Jun 2010, Rob wrote:
    50% of the fee paid to insurers is actually taxes, which is why the governmnet care so much. Gordon Brown added it during hs tenure as Chancellor (It started of small, Gordon changed that).

    This comment is factually incorrect. It's 5% for most types of policy (like a Home Insurance or Car insurance policy), and 17.5% for insurances that cover 'luxury' items like holidays. You can check this out virtually anywhere online or on any insurance literature - it's the Insurance Premium Tax.

    The remaining funds are calculated from rates - that is, judgements of how much it will cost to insure each of the variables that you have cover for (i.e, Third Party, Fire and Theft for your vehicle). These premiums are then placed into the pot, from which payments come in the event of a claim. Profit is made when the payout on a particular book of business is less that the premiums, and potentially also from Share Pricing (the businesses net worth). That's just how it works, it has nothing to do with Gordon Brown.

    Stunning. He's gone, his party's out of power and this story is totally unrelated to him, but you are still able to associate something you don't approve of with Gordon Brown.

  • Comment number 83.

    I spent most of yesterday trying to gain insurance for my 17yr old. I was given a quote of "£8,000", yes that's right, £8,000, for him to drive a nice safe golf or megane, both 8 yrs old, and was told the only option was to go for a 1 litre old banger, and the 3rd party insurance for that would still be over £2,500. At least 3 companies said they don't insure 17 yr olds at all. His neighbour has been charged £1,500, but she's a girl. How can anyone afford it?

  • Comment number 84.

    Sadly, this is nothing new, nor surprising, but I wonder if a method of allowing parents to 'guarantee' car insurance for their children might not help both insurers and drivers achieve a sensible level for the premium?

    I explain more in my blog, here: , but in essence: when I was young my parents 'guaranteed' my car loan. I took it out in my name and paid it myself but they agreed to stump up if I defaulted. Could a similar idea not be implemented by the insurance companies, where parents insurance premiums are adjusted to help protect their child's premium, which can then be reduced to a more sensible level whilst still reflecting the risk of the younger driver?

  • Comment number 85.

    Simple solution is to assume the parents are lying (which will often be the case) and give anyone a higher rate when there is a new driver in the home whether or not they're the main driver.

  • Comment number 86.

    I think these companies (insurance, utility, supermarkets, etc.) should realise that the more they rip us off, the more we'll adjust things accordingly.

    What I will add is that I seriously object to paying IPT (insurance premium tax) on something I am compelled (by law) to purchase - namely car/motorbike insurace. It used to be a general principle that a legal requirement to pay something wouldn't be taxed. Well, we all know about governments and principles.

  • Comment number 87.

    I think the £4,000 quote in the original article (for a Micra!) is ridiculous. Of course people are going to cheat, and more importantly people are simply not going to bother with insurance (and when the get a ban, having a licence either) - it's a self-fulfilling prophecy.

    Who is to blame? Well, it must partly be the insurance companies - all the false claims for whiplash that are not even contested for a start. My ex ran into the back of someone in an emergency situation at very low speed. The driver was awarded several thousand pounds for whiplash. Some months later I was in the pub chatting the very same bloke, who didn't know who I was, who was boasting about his nice little earner. He freely confessed there was no injury, but he went to a no-win, no fee outfit as he fancied a few grand.

    And that's the real culprit - the legal trade. No-win, no fee has pushed the cost of all insurance through the roof, not just motor insurance. People like the bloke above might be made happy for a while, but the misery caused to others, businesses as well as young drivers, is incalculable - and achieves no form of justice other than making sure Solicitors can have a nice new car this year. The legal trade should hang it's collective head in shame - they are no better than the greeday bankers in my book.

  • Comment number 88.

    I did exactly this for my son when we bought him his first car. He was 17 and passed his test at the first attempt. If we'd insured it in his name the annual premium would have been more than twice what the car was worth!

    Perhaps if insurance premiums weren't such an outrageous rip-off, people wouldn't do it.

  • Comment number 89.

    panchopablo wrote: Surely it is discrimination to charge an 18 year old man ridiculous amounts of money for car insurance.

    No, it's common sense and keeps premiums lower for the rest of us.

  • Comment number 90.

    I'd rather be hit by someone who is 'fronted' than the uninsured drunk driver who wrote off my wife's car. Insurance now sky high, she lost her no claims , didn't get the price she paid for the car from HER insurance company and yes that's right neither the cops or her insurance company gave a monkeys. The guy had the cheek to plead not guilty even though he was too drunk to run away after the crash and was caught. Just another excuse to moan when they aren't making maximum profits and dividends.

  • Comment number 91.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 92.

    To decide between insurance and my children’s education is not a brain teaser. The number of natural disasters as well as cars built to collapse upon impact, for drivers’ protection, sure puts a burden on insurance companies but it doesn’t help me if I can’t afford.

  • Comment number 93.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 94.

    With regard to the title question of Is the price of insurance too high?

    Do you of any Insurance companies not making very big profits?

  • Comment number 95.

    I wouldn't worry about it.

    When industries threaten draconion solutions like prosecution, they're admitting there is nothing they can really do. If they had any way of distinguishing, they'd just refuse to honor the claim. Obviously. they don't.

  • Comment number 96.

    If you take a look through your local paper, at the in Court entries there are often people fined for not having car insurance. The fines dished out are mainly under £100.00 so its not surprising that some people take the view to insure the car in an "experienced" person's name!

    Maybe the fine should be 1.5 times the value of a quote on the day of the fine and then maybe, it might have the right impact on habits.

    If the Courts continue to dish out small fines what is the point of being lawful?

  • Comment number 97.

    A great many young males are not responsible behind the wheel, in short a lot are simply terrifying. An engine MUST be revved, the 'sounds' inside the car MUST be at maximum and let's not forget the mobile 'phone.
    They are not content with a small engined 'uncool' car, Subarus are the 'must have' with the BMW following close behind.
    The more safety features a car has, the more they are convinced that they are invincible, speed limits are ignored, overtaking on double white lines and hatched road areas are commonplace and tailgating other drivers appears to be great fun.
    The question that should be asked is whether the age for taking a test should be raised, whether new young drivers should face certain restrictions, ie maximum engine size and a limit on passengers.
    In my opinion, insurance costs for young drivers is not too high but it does impact on the rest of us.
    If parents are falsifying information then they are doing their children NO favours at all in the same way that if a driver has made significant alterations to a vehicle without disclosing it at renewal then this is downright dishonest and possibly dangerous to other road users.
    Sorry if this appears to target young males but it is a fact that girls of the same age are generally more mature and responsible.

  • Comment number 98.

    I completely disagree with the huge costs for first time drivers. The insurance companies are assuming we are all terrible drivers who are definitely going to cause a crash or accident. Why don't they charge reasonable premiums with a high excess and then IF you do cause a crash or accident, THEN you get a much higher premium next year.

    It seems like putting someone in jail before they have even committed a crime.

    I passed my test when I was 23 (2 years ago) and was driving a K reg Nova (not a boy racer one, no mods, my grandma the only previous owner, 24,000 miles on it) and my insurance was about £1,700. I have only been in 2 accidents (both of which, someone else rear ended me whilst I was stationary hence not my fault). Why should I have to pay more than the 2 middle aged businessmen that crashed into me?

  • Comment number 99.

    All insurance is to expensive , Im 70 and have never claimed on the insurance , but im afraid not to have it because the minute i dont pay thats when the bad stuff happens , its not cheap and while on my own now its costing just the same when it was two of us, but my income has gone down by a half or more ... its a worry . I dont drive so its just house and contents i pay .

  • Comment number 100.

    They need to have tougher punishments for uninsured drivers. Most people caught without insurance get a fine of about £100-200. Thats a tiny fraction of the money ive had to pay in insurance over the years, so its no wonder people take the risk. If people were fined a few thousand for having no insurance then they would think twice and everyones insurance rates would drop.


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