Using telematics or app-based technology are among the ways younger drivers in the United Kingdom can help reduce car insurance premiums, Aviva reported following the release of commissioned research that shows a third of parents may no longer be able cover the cost of their child’s insurance.
The bank of Mom and Dad may be closed for 32% of surveyed parents who say they will have to give up paying for their child’s car insurance because of a new European Union directive that will prohibit insurers from using gender when calculating premiums, notes a statement from Aviva.
The online research, commissioned by the company, was conducted by ICM in October and involved 1,005 parents who pay for the car insurance of one or more child, either on a separate vehicle or their own.
The survey notes a third of respondents say they will look at changing their child’s car for a less expensive model, and 44% say they will need to consider increasing their contributions toward their children’s premiums.
Beyond telematics, Aviva reports that younger drivers can help lower their rates by the following: consider using a less powerful car (generally, the higher the engine size, the higher the premium); pool insurance on a multi-vehicle policy; share the car with a parent or other older driver (a genuine user of the vehicle); limit mileage; and park off the road or in a garage.
Parents believe their children will have to make some changes in their driving habits, notes the Aviva statement. In all, 26% say their children will have to drive less once the directive comes into force, and 19% report their children will need to sell their cars and use public transport instead.
Aviva’s suggests, however, that these views may be premature. More than 60% of polled parents think the new legislation will increase car insurance costs for their children, despite industry figures predicting that premiums are likely to fall by as much as 10% for young male drivers. For young females drivers, a paper by ABI Research cites rates increasing by as much as 25%.
“The research shows parents are concerned their children may have to drive less, or even more seriously, give up driving altogether because of the new legislation,” Steve Treloar, retail director at Aviva, says in the company statement. “But the sooner young drivers start earning no claims discount, the sooner they could benefit from lower premiums.”