Car insurance for under 25s and young drivers

According to the Queensland Government, drivers aged 16 to 24 are more likely to be involved in serious crashes than mature drivers.¹ This is why car insurance for a 17-year-old, for example, would usually cost more than it would for a more experienced driver.

Some key reasons younger drivers are more likely to be involved in a car accident include:

• Speeding
• Driving while intoxicated
• Driving while tired
• Being distracted behind the wheel
• Being over-confident
• Driving with other risk-takers in the car.

As a result of these factors, car insurance for young drivers in this age group would generally cost more than it would for people over 25.

There are various factors that insurers use to determine the cost of coverage for all Australians, including younger drivers. These factors include, but are not limited to:

• The make, model and market value of your car
• The condition of your vehicle
• Your age, gender and address
• Your driving history
• The level of cover you choose
• Any optional extras you add to your policy (such as roadside assistance)

By now, you know that car insurance for younger drivers will likely cost more than it would for older motorists. Still, there may be ways you can reduce your premiums. Here are some factors to take into consideration:

• The type of car you buy. Cars that are modified and expensive models may attract higher premiums. So can a brand new car with a higher price tag. Opting for a reliable model that offers good safety features may help to avoid higher premiums.
• How you protect your car. Protecting your vehicle with anti-theft devices such as alarms or immobilisers may lead to more affordable cover.
• Where you park your car. Premiums are usually more expensive if your car is parked on the street, so, where possible, park it in a garage, carport or another secure location. Your insurer may require this information when you purchase a policy.
• How you pay your insurance. It may be cheaper to pay your annual premium in full rather than in instalments. It’s a higher upfront cost, but you could save in the long run.
• How you use your car. Some insurers offer low-kilometre policies for drivers who drive less than a specified amount of kilometres each year. If you don’t drive a lot, you might be able to find policy with a lower premium.
• How safely you drive. Avoiding fines and licence suspensions could help you avoid large increases to your long-term insurance premiums.

Read our guide for more helpful tips on how you can reduce your car insurance premiums.

There are cheaper insurance options like Third Party Property Damage (TPPD) and Third Party Fire and Theft (TPFT) insurance. These policies are typically more affordable than comprehensive car cover. Comprehensive car insurance may be the most expensive option for young drivers, but it also offers the highest degree of protection.

There are options within a comprehensive policy you can opt in or out of to save costs, such as kilometre-based products like pay as you drive, or ensuring your car is parked safely inside a lockable garage, for example.

It’s always a good idea to shop around and compare quotes from different providers to make sure you find a great deal. Before you settle on car insurance, consider the type of protection you require.

Here’s a breakdown of what’s included in each type of car insurance:

Comprehensive

As the highest level of car insurance, comprehensive covers your car if it’s damaged in an at-fault accident or by weather events (like storms or fires) and if it’s vandalised or stolen. Comprehensive insurance also provides cover for damage you cause to other people’s cars and property in an accident.

Third Party Property Damage (TPPD)

TPPD covers damage you cause to other people’s property and vehicles in the event of an accident. It may also offer limited cover for your car’s value in an accident – but only if another driver causes the accident and they’re not insured.

Third Party Fire and Theft (TPFT)

With TPFT, you’ll be covered for damage you cause to other people’s vehicles and property in the event of an accident, as well as limited cover if your car is damaged by fire or stolen.

Compulsory Third Party (CTP)

It’s a requirement in all states and territories to take out CTP insurance (known as Green Slip insurance in NSW). In some states, it’s included in your car registration. It covers death or injury to others. Depending on the state your vehicle is insured in, it may also cover injuries suffered by the at-fault driver. It doesn’t cover damage to vehicles or property.

Other factors to consider when taking out insurance for your car and what you pay when you claim. Here are a few things you may want to consider:

• The excess you pay. An age and/or an inexperienced driver excess may apply for drivers under a certain age, such as 25 years of age, in addition to the basic excess for your policy.
• Additional fees. Some insurers may charge you a fee if you cancel a policy outside the agreed cooling-off period.

It’s important to understand your policy’s terms and conditions, which can be found in your PDS.

Car insurance covers a vehicle and not individual people. Generally, your parents will not need to purchase a separate insurance policy for you to drive their car, provided the car is insured.  You will not need a separate policy for situations where you drive your parents’ car, however, most insurers ask that all regular drivers are listed on the insurance policy.

Some insurers may require a learner driver to be listed on the insured vehicle’s policy, whereas other insurers may impose an additional excess, such as an unlisted driver excess, to cover your use of the insured vehicle for losses that occur when a learner driver is in charge of the car.

If your parents or guardians don’t advise their insurer that you’re driving their vehicle, there’s a risk that the insurer will not pay out a claim, or they may incur a much higher excess than they anticipated in the event of a claim.

As each insurance company states different terms and conditions on their policies, there is no guarantee of lower premiums as you get older. It generally comes down to years of driving experience, your claims history and a safe driving record.

If your friend will regularly be driving your car, it’s a good idea to list them as a regular or additional driver. This is usually as simple as providing your insurance company with their information. Keep in mind that this may affect your premiums and excess in the event of an accident.

Generally, insurers will require the following information:

• Your friend’s name
• Their gender
• Their date of birth
• How long they’ve been driving and the type of licence they hold
• Their insurance claims history
• Any past convictions of driving offences

Every policy differs, and, depending on your insurer, you may need to list a learner driver. It’s recommended that you contact your insurer to check if learner drivers are covered under your policy or if there are specific guidelines you need to follow.