Contributed by Courtney Goudswaard, Digital PR Manager at Budget Direct
As exciting as it can be to pass the baton of freedom on to the learner drivers in your home, it can also be the beginnings of concerns you never knew were possible. Suddenly the parameters of where your child can go and what they can get up to extend, and if that’s not stressful enough, there’s also pause for thought about how your bank balance could change hour-upon-hour as a range of scenarios play out until your loved one returns home.
As a young learner driver in Australia, you fall into a high-risk age group, which means you’ll typically pay more for your car insurance than people in some other age groups. The insurer is taking a certain amount of risk in insuring you against accidents. What you pay depends on how likely it is you’ll make a claim against your policy in the future.
— Budget Direct (@BudgetDirect) August 22, 2017
You may be the most careful and responsible learner driver in the country but from an insurer’s standpoint, you can be seen as a high risk of road accidents due to your age and lack of experience on the road.
Road crashes are the leading cause of death and acquired disability in young Australians, at a time of life when they are otherwise at their healthiest. Young people aged 17-25 make up 13% of the Australian population but 22% of the yearly road toll (The Conversation).
How can you reduce your insurance costs as a learner driver?
Long-term, the best way to keep car insurance costs down is to maintain an excellent driving record. If you can string together a few years without speeding, losing your licence or claiming on your insurance, your premiums will tend to stay lower over time.
It is also worth considering a safe, reliable car will typically cost less to insure than an expensive sports or luxury car. Cars with alarms, immobilisers and other anti-theft devices may also result in lower premiums.
Another important point is where you park your car. Being in a secure garage or carport – instead of out on the street – can also contribute to a more competitive premium. Insurers will also take a look at how much driving you do – a low-kilometre driver may find their insurance a bit cheaper than someone who spends more time on the roads.
— Budget Direct (@BudgetDirect) August 25, 2017
Being a good driver is also about maintaining your vehicle properly. The condition of your tyres can have a big impact on road safety, for example. These measures also apply to the insurance premiums of your friends or family if you drive their car and are insured under their policy.
Comprehensive car insurance provides the highest degree of protection for car owners, regardless of their age. Although there are cheaper insurance options available such as Third Party Property/Fire and Theft, these DO NOT cover your own car in most circumstances if you’re involved in an accident. Without comprehensive insurance, you risk being left with a huge repair bill – or losing the car completely – if you have a bad road smash.
Understanding car insurance and your excess
The Compulsory Third Party (CTP) insurance that comes with your car registration (in most parts of Australia) provides compensation for people killed or injured when your vehicle is involved in an accident.
Comprehensive insurance covers damage to your car, damage to other people’s property and damage or loss resulting from your car being stolen. Here’s a handy rundown of the different types of car insurance.
If you’re the parent of an L-plater, check with your insurer about the cost difference between including your offspring as an additional driver on your existing insurance as opposed to taking out a separate policy.
Some insurers will offer discounts for new customers that sign up online for comprehensive cover. These discounts often only last for a year, but they can certainly help reduce initial costs.
If you’re adding a learner driver to your policy, be prepared to pay more in the form of an excess on any claims made. This is the amount you have to pay if you decide to make a claim on your policy. It’s a way of you accepting a small portion of the risk yourself.
Depending on the policy and the age of the learner driver, excess can come in several forms:
- Standard excess – This is the basic excess that applies to the policy regardless of who is driving
- Younger driver excess – This is an additional excess applied to any driver under the age of 25
- Learner driver excess – L-platers often have their own excess applied
- Optional excess – With optional excess, you can increase or decrease your excess depending on how much of a premium you want to pay upfront. For example, if you want to lower your premium, you could agree to raise your excess, from say $600 to $1000. This can lower your up-front cost at the time of buying because some of the risk has now been transferred from your insurer back to you.
- Car excess – An additional excess may come into play based on the type or age of the vehicle being driven.
- Inexperienced driver excess – This type of excess typically applies to learner drivers over 25 years old and can be more expensive than a typical excess.
Whether you’re an L-plater paying for their own car insurance or a parent wondering about the cheapest way to make sure your child is properly insured, it pays to do your research.
— 9News Queensland (@9NewsQueensland) October 22, 2017
As a parent, you may find you can get a more reasonable price by reducing the excess and counteracting the extra L-plater premium costs with any available discounts. Car insurance is competitive in Australia, and there are plenty of comparison websites to help you narrow down your choices.
Always read the Product Disclosure Statement of any policy you sign up for so you know exactly what’s covered – and to protect yourself from any surprises down the track.
About Courtney Goudswaard
Courtney Goudswaard is the Digital PR Manager at Budget Direct [www.budgetdirect.com.au]. With a background in Multimedia Journalism, she has wholeheartedly immersed herself into the digital marketing world specialising in content marketing. She’s passionate about inspiring, educating and entertaining others through the power of content. Follow her on twitter @courtig.