HAVING an interest in consumer affairs means I often have to look in details about issues around insurance.
For example, you won’t find me paying hundreds to insure my new washing machine as, I believe, it’s hardly ever worth the cost and companies will do everything they can not to pay out when there’s a problem.
But here’s my latest and very personal gripe.
My daughter is 17 and has just passed her driving test. Remember what that felt like? The freedom. The promise of independence.
I remember when I was in her position, it felt like the world was my oyster and I was suddenly free. No more relying on my parents (my dad only had a motorbike) or catching buses at awkward times.
My parents weren’t well off, so whatever I had I had to pay for – a good lesson in life I think. But with a Saturday and holiday job, and using my savings to buy a car, this was all within my reach.
But for my teenage girl, there’s a shadow over all of this – the phenomenal cost of car insurance.
This is on top of the decision of whether or not to go to university and thus take on the 30-year ‘tax’ burden of paying for her higher education.
Initially her car, worth maybe £300 at a push, would cost her £1,900 to insure for a year. But just before she passed her test, the equality change came in and pushed her premium up to £2,400.
My girl is not lazy, she has a weekend job, works extra during the week when she can, so she knows the value of money. She’s studying, so is not in full-time work.
But her car insurance is more than double that of the two cars in our household which are insured for two drivers, high mileage and full business use! I find it so hard to justify that.
I don’t fully blame the insurance industry for this need to promote equality between male and female drivers but I do question whether this is about equality at all.
I would normally be first in line to defend the rights of women or men against discrimination.
But insurance is based on risk – and risk statistics dictate (it’s a fact) that young boys aged 17 – 25 are the highest risk for having an accident.
I know this better than most having made a documentary about it a few months ago. Their risks are much higher and part of this is to do with their psychological development. They are at the height of their risk-taking vibe during this time. Fact.
Also the insurance industry in bringing in these changes could be said to be hypocritical.
Isn’t it unfair to charge someone over the age of 65 more for their travel insurance? Isn’t that discrimination too? Age-ist? To have a blanket policy for everyone over the age of 65?
If asked to justify this, the insurance industry would probably say that these people are at ‘higher’ risk of a problem while on holiday.
This just proves my point – insurance should be based on risk, risks which can be proved through independent data, and issues around gender should not come into it.
To me, teenage drivers, particularly females, are seen as a cash cow for picking up the cost of more claims. Claims, in my view, should go up according to how many accidents you have, how many times you commit a driving offence etc. Oh, but I forgot, they do go up then don’t they? So the insurance industry wins whichever ‘line’ it chooses to take.
What do you think?