Some car insurance companies like to take the lowest risk route possible. Other insurance companies, however, like to spot something that could make them a good profit and try to make something of it. The operative word here is "could". Young drivers are actually far more likely to have an accident than almost any other categorisation of driver. This makes them a higher risk, allowing higher premiums to be charged.
Yet that doesn't mean that insuring a newly-qualified driver is a bad idea that will lead an insurance company into having to pay out more and more claims. A young driver starts with no history of insurance, and thus no possibility of a no claims bonus. Because of this, they can be charged high premiums from the very start, which can provide for higher possible profits. Not only this, but insurance companies have the ability to charge higher premiums to young drivers because they are a higher risk.
Now, with some groups of drivers, it can be unfair to categorise them as higher risk, as a justification for charging higher premiums. With newly-qualified young drivers, however, there are some facts behind this which back up the insurer's enthusiasm to make money out of the risks.
The present driving test is not one that rewards attitude and judgement. Rather, it will reward lower level skills, and young males find these kinds of tests easier to pass. This doesn't necessarily mean they are better drivers but that they can pass the test easier.
The subject of passengers also raises the risk bar. Passengers of a young novice driver still have to be covered by that driver's third party insurance. This is expensive as passengers of young drivers face a higher risk of being involved in a serious accident. The more passengers there are, the higher the likelihood of a crash. Adding one passenger makes a crash twice as likely and it becomes 5 times as likely should there be two or more characters.
Inexperienced drivers have been shown by research to be up to 2 seconds slower to recognise possible dangers, which explains why it is 9 times more likely a male driver aged 17-20 is at fault for an accident than someone aged 31-40 who has the same experience. Also, a 17 year old male is 7 times more likely than a middle-aged man to be involved in an accident for every mile driven. They are also 3 times as likely to be in an active as opposed to passive accident. The fact that more journeys are made at night by young drivers also explains why there are more accidents involving them.
These risks need to be covered by higher insurance premiums,which is why insurers specialise in young drivers.
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