The cost of motor insurance - Transport Committee Contents

5  Young drivers

45. The exceptionally high cost of motor insurance for young drivers was one of the main reasons why we undertook our inquiry. While we accept that insurance is provided on the basis of detailed risk assessments not all young drivers behave recklessly behind the wheel and many safe, young drivers are penalised because of the actions of those who are involved in accidents.[125] In addition, as the previous Government acknowledged, "most young drivers do not intentionally engage in high-risk behaviour but are hampered by a lack of experience and poor self-assessment".[126] We were therefore keen to explore what action young drivers could take to indicate to insurers that they are safe and skilled; and how the Government could assist with this and raise the standard of driving amongst young people.

What should the Department do?

46. We received a number of suggestions of action the Government could take to ensure that young drivers were safer and better equipped with the full range of driving skills. The ABI called for a minimum one-year learning period for drivers and argued that "newly-qualified drivers aged under 20 should be limited to carrying no more than one passenger aged under 20 during the first six months of driving".[127] Cadence Driver Development advocated a two-tier licensing system in which novice drivers would hold a restricted licence for two years, at the end of which time there would be a further test.[128] Edmund King, President of the AA, argued that there ought to be a greater focus on road safety in the school curriculum.[129] We also questioned witnesses about the desirability of increasing the minimum driving age.[130]

47. The Department for Transport ruled out "additional regulation" in this area, which it argued would "bear down even on those who want to be safe and responsible" and which might have perverse consequences.[131] It said it was "working on measures to improve driver training and testing, and is considering whether further measures should be developed".[132] The Minister said that the Department was considering:[133]

  • pre-driving tests for 14 to 16 year olds, "to get them more aware at school as to the sort of pressures they are going to be under and the sort of skills they are going to need before they start taking their driving tests";
  • changing the driving test, to "make it more difficult and more suitable for the skills they are going to need once they pass the test". This would include making candidates navigate their own route during the test;
  • looking at ways of training learner drivers in motorway driving and other aspects of "independent driving"; and
  • replacing the unsuccessful Pass Plus advanced driving course for novice drivers with other means of enabling such drivers to show insurers that they are safe,

48. Many of these issues were under consideration when our predecessors published a Report on novice drivers in 2007.[134] In response to that Report, the then Government said that the need for modernisation of the driving test was "pressing" and that it was committed to "fundamental reform of driver training and testing".[135] The debate does not appear to have moved on, despite the continuing appalling accident rate for young drivers. The Government's claim that it does not wish to bear down on the responsible by introducing more stringent requirements on novice drivers is somewhat hollow if this stance contributes to higher premiums for young drivers, who are consequently unable to afford to drive.

49. We welcome the Minister's commitment to making the driving test more rigorous, exploring other ways of ensuring that young drivers are fully trained before they are licensed, and to making an advanced driving course available which can effectively signal to insurers that drivers who have completed it are safer. Many of these ideas were discussed in our predecessors' Report into novice drivers. The Minister's commitment must now be backed up by a consultation document setting out the measures the Government wishes to explore, a timetable for implementing any legislative and procedural changes, and an indication of likely costs and how they will be budgeted for. We recommend that the Government publish such a document within the next six months, with a view to implementing changes to the driving tests and other measures during this Parliament. We will pay close attention to the Government's proposals.

What can insurers do?

50. One consequence of the high accident rate amongst young drivers is that the market for insurance for young drivers "is less competitive" so "young drivers have less choice".[136] The Department shared this concern, which it attributed to the high cost of long-term medical care arising from serious accidents involving young drivers.[137] BIBA suggested that better signposting of brokers specialising in policies for young drivers might help alleviate this problem but the ABI was unconvinced.[138]

51. There were various references in the evidence we received to new technology which could be fitted in cars to assess how they were driven and thereby influence the premiums offered to drivers.[139] However, ESVA questioned why the 'first wave' of such 'black box' technology had not achieved better market penetration.[140] The Department said it would "work with the insurance industry on whether new insurance products can be developed, with discounts where young drivers have chosen enhanced training pre- and/or post-test; or are happy to accept in return restrictions such as not driving at night".[141]

52. Insurers clearly have a part to play in helping young drivers find affordable insurance, without compromising the risk assessments on which insurance is based. Given the importance of this issue from a public policy perspective, we recommend that the Department for Transport facilitate investigation of effective means of deploying and publicising new technology which can assess how cars are driven by young drivers and thereby provide more information on which risk assessments can be made. For example, we suggest that the Department could host a conference on this issue involving all relevant parties, during the summer, and establish and participate in an industry working group on how this technology can be most effectively used.

125   The Road Haulage Association submitted evidence on the impact of high premiums on young HGV drivers - Ev w23-24. Back

126   Transport Committee, Eleventh Special Report, 2006-07, Novice Drivers: Government Response to the Committee's Seventh Report of Session 2006-07, HC 1051, (hereafter Government response to Novice Drivers) response to recommendation 3. Back

127   Ev 52 paragraph 4.1, Ev 71-72 paragraph 3.12 and Ev w9. Back

128   Ev w1-4. Aviva also called for a "complete revamp of driver training", Ev w26 paragraph 2.3 and see Ev 46 paragraph 1.9. Back

129   Q55. Back

130   Qq 155-56, 269. Back

131   Ev 74. Back

132   Ibid. Back

133   Q269. Back

134   Seventh Report, 2006-07, Novice Drivers, HC 355. Back

135   Government response to Novice Drivers, responses to recommendations 1 and 45. Back

136   Ev 62 paragraph 3.2. Back

137   Ev 74. Back

138   Ev 72 paragraph 5.3, Ev 74 paragraph 1.3 and Q127; and Q133 Back

139   Qq 37, 56, 74, Ev 58 paragraph 7.2, Ev 63 paragraph 3.9, Ev w6 paragraphs 4.1-4.4, Ev w37 and Ev w40-41. Back

140   Ev 75. Back

141   HC Deb, 7 Feb 11, c57W. Back

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