It can often prove quite difficult for young Australians to find affordable car insurance.
For decades, younger and more inexperienced drivers throughout Australia have been paying significantly larger premiums on their motor insurance than everyone else on the road, but do we really know why?
In a country where young people mostly live at home throughout their studies and require cars to get to and from work and university, why are young people paying more for their car insurance? Let’s break down (See what I did there 😉?) why millennials are paying more for car insurance than the generation preceding them.
Simply put, insurance companies are faced with more claims from people under 25 than any other age group (Compare the Market, 2021). The data indicates that young drivers are more inexperienced, take more risks and are more easily distracted than older drivers on the road.
With less time spent behind the wheel, it’s no wonder that young drivers are less experienced than their older counterparts. A learner driver (in Victoria) must drive 120 hours before they’re eligible to get their probationary driver’s license. That’s the equivalent of fifteen full days of driving 8 hours. Yep, just 15 days.
Did you know that young Australians are four times more likely to be involved in a serious or fatal crash than a more experienced driver? (Victoria Police, 2019) Insurance companies pay out more claims to drivers under 25 than any other age group (Compare the Market, 2021), and premiums for this group are more expensive as a result. If you’re statistically more likely to get into an accident, you’re probably going to pay more for protection.
According to the Australian Institute of Family Studies (AIFS), 80% of p-plater drivers had performed some form of ‘risky driving’ in their ten drives prior to the survey, including speeding more than 10km/h over the speed limit, and driving while tired. 20% of fatal road accidents occur due to driver fatigue (TAC, 2021), Risky driving means younger drivers are more likely to be involved in an accident (Scott-Parker & Oviedo-Trespalacios, 2017), resulting in more claim applications with their insurers.
As frustrating as it can be for younger drivers having to pay expensive premiums for their protection, responsible driving as a young adult can work in their favour, as drivers who historically have had more claims and crashes will often pay a higher premium than drivers without a negative history.
In addition, car insurance premiums are also dependant on the make and model of your vehicle, where the vehicle is kept and where in Australia you live!
Whether you’re on your daily commute to the office, picking up dinner for the family or dropping the kids off at training, eric can be there to protect you from the unpredictable moments in between. eric’s Comprehensive Car Insurance can help pay for your repairs or, in extreme cases, replace your car. Simple as that.
To find out more about eric’s Comprehensive Car Insurance, click here.
For more tips, tricks and education for your motoring journey, visit ericinsurance.com.au
This article may contain general financial product advice that does not take into account your personal financial circumstance. Make sure you read the Product Disclosure Statement (PDS) before making any decisions about your insurance.