Claims-free drivers could see higher premiums, says trade body

Biba has warned that suggestions from the Transport Select Committee today for the insurance industry to reduce premiums for novice drivers could lead to increased premiums for claim-free drivers.

Responding to today’s report from the Transport Select Committee on ‘Novice Drivers’, Graeme Trudgill, BIBA Technical Services Manager, said: ”Biba believes it is only fair that the higher cost of claims caused by young drivers is reflected in their premiums.

“Claim-free drivers should not be penalised because of reckless youngsters. Biba believes in a fair system of risk-based pricing.

“Suggestions from the Transport Committee today that the insurance industry should consider reducing premiums for novice drivers would only lead to an increase in premiums for claim-free drivers.”

Eric Galbraith, Biba Chief Executive, added: “Insurance can seem expensive for young drivers, especially if they are going online to find the best deal. Using a broker will ensure that you have the insurance product to suit your needs and can help you find the best deal.

Brokers deal with many different insurers offering choice, specialist young driver policies, short period policies and flexible instalment facilities. On top of that, they will give free advice about excesses, significant features and exclusions.”

Biba is calling on the Government to ensure:

1. Greater awareness of the requirement for insurance and the consequences of uninsured driving and the role of the MIB included in the Highway code. There is currently one short paragraph in the highway code saying you must have a valid insurance certificate. We believe the purpose of, and legal requirement for, third party insurance should feature much more prominently in the Highway Code.

2. Government actively campaign on the issues of uninsured driving – with a particular focus on young drivers.

3. More insurance based questions raised in the driving theory test than at present.

4. Sentencing guidelines for Magistrates should be revised to require a minimum fine for uninsured driving which is no lower than the fixed penalty and in fact be more representative of the insurance premium.