Young drivers car insurance

By Olivia Gee ·

Under 25? Your car insurance premium may have just moved up a notch. Young drivers or those new to the road generally face a high premium or excess because they are statistically riskier drivers.

So, you might be lured into a sneaky work-around to minimise the extra insurance costs. But often it's just not worth it.

We’ve heard of young drivers recruiting parents to take ownership of their car insurance while nominating themselves as a young driver on the policy. It may save you some dough in the long run, but do you want to jeopardise a family member’s no claim bonus if you’re the cause of an accident?

Not to mention the fact you’d be missing out on building up loyalty discount and no claim bonus of your own. It pays to be independent, doesn't it? Let’s explore other factors of car insurance you need to be aware of.

Car Insurance Comparison Table - last updated January 16, 2021

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How can I get added to the family policy?

The family member that owns the car insurance policy will have to do the calling, not you. So set aside some time where you can discuss adding your name to the policy before they make the call. Make sure it benefits both of you, and that they understand the impact it may have on their policy if you cause an accident.

Generally, your family member will need to tell the insurer your age, gender, licence type, car type and any modifications, plus where it’s parked before getting an idea of how much the premium and excess will be.

Stand alone policy options for young drivers

You may be a young driver with a potentially costly car insurance policy under your belt. But if you’ve been driving everyday since you were 17 and you’re now 23 years old, that’s six years driving experience. If you’ve had a pretty good track record, then you could be entitled to a cheaper car insurance. No harm in asking.

The price you pay will be determined by the underwriter’s assessment of your personal situation. So if you can prove you’re not a typical high-risk young driver then you could save big bucks on your car insurance.

And if you set up your own loyalty and no claim bonus discounts, it can benefit your pocket for years to come.

Car insurance exclusions

There are heaps of young driver restrictions, from passenger limits to types of car models you’re allowed to drive, and even the time of day your insurance will cover you for. Get your head around it all by reading up on the RMS licence rules.

Young driver car insurance exclusions

Just like the road rules, it's pretty high stakes if you fail to follow your insurance instructions. You'll risk forfeiting your policy, and in some cases you can risk losing your licence for a period of time.

If you’re at fault in a car accident, there are many factors that could affect your driver’s licence or your car insurance policy. These include being found:

Learner Driver

  • With any amount of alcohol or illicit drugs in your system
  • Driving unsupervised or supervised by an unsuitable person (e.g. a learner, provisional license holder or someone with a disqualified license)
  • Exceeding permitted speed limit
  • Using a tow-bar
  • Using your mobile in any way, including hands-free
  • Misleading your insurer with the type of car you drive

P1

  • With any amount of alcohol or illicit drugs in your system.
  • Exceeding permitted speed limit
  • Misleading your insurer with the type of car you drive.
  • Using your mobile in any way, including hands-free
  • Exceeding the permitted weight when using a tow-bar
  • Carrying passengers under the age of 21 during restricted times

P2

  • With any amount of alcohol or illicit drugs in your system
  • Exceeding permitted speed limit
  • Supervising a Learner driver
  • Driving a high-performance car

Is this your first car insurance policy?

Becoming independent and setting up your first car is certainly an exciting time. But as you know, your premium is likely to be incredibly expensive compared to a driver with a good driving record and a full licence. Some of the key car insurance features you need to be aware of include:

Basic car, basic premium

The simpler your car, the less you pay. In most instances, you will not be allowed to drive a high-powered car until you have your full licence. If caught driving one, you may lose your licence, get penalised and if at fault in an accident, your insurer may void your policy altogether. 

Keep it clean and well-oiled

If you have a clean driving record while on your Ps, you may be rewarded with a discount on your policy. If you complete a ‘safe driving course’ you could see further discounts for your conscientious efforts.

Compare quotes

Car insurance is probably the last thing on your mind when purchasing a new car but it should never be rushed. Take the time to compare quotes, as you could save more than $1,000 per year, just by comparing! 

How to choose a car insurance policy: price versus features

It’s one thing to simply compare prices, and another to compare value for money. It may even be worth paying a little extra to get the features you really need for your car insurance.

Some car insurance companies will offer all or only a few of these features as standard within a policy. So if you’ve narrowed down your search and are hung up on a couple of these options, make sure you ask if it’s already in an existing policy.

Emergency or roadside assistance

This is for that moment when you're broken down on the highway and need some help with the engine. Many comprehensive policies come with roadside assistance included, but with others you’ll have to opt-in and pay extra.

Optional car hire

This is usually an addition to your policy, but some will cover you for a certain period or dollar amount if you require alternative transport after a not-at-fault accident or theft. Check your Product Disclosure Statement (PDS) for details.

Optional rating protection

It's not a common feature, but one worth asking about. If you’re in an accident, you may pay an annual fee to keep your premium or no claim bonus intact. Check the fine print on this one.

Market value vs agreed value

If your car is only worth $9,000 (according to the insurer) and you insure it for $20,000, then that’s an agreed value. Some insurers will cap the agreed value. 

Easy payment

Some insurers will offer a discount if you pay your policy for the year in one lump sum. If it’s out of budget, then we recommend paying in instalments. You may miss out on a discount, but your payments will be easier to manage. Want to save even more? Purchase your car insurance online and you'll usually get a discount on the first yearly premium.

Insurance Tip: Do you know the difference between third party property and comprehensive car insurance? It’s not as simple as it seems, but the more you read up and compare policies the more you’ll comprehend the essentials.

*Any information provided on this page should be considered a summary and general advice only. All information should be verified before purchase via the relevant Product Disclosure Statement (PDS).

^See information about the Mozo Experts Choice Car Insurance Awards

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Olivia Gee
Money writer

As a personal finance writer at Mozo, Olivia investigates insurance, banking and property. After completing a double degree in journalism and media and communications, Olivia became a lifestyle editor at Time Out Sydney and freelanced for notable publications such as Guardian Australia and SBS News. Now she is Mozo’s resident car insurance enthusiast, and is certified (ASIC RG146 Tier 2) to provide general advice in general insurance. She also creates audible finance adventures as co-host of Mozo’s podcast, The Finance Burrito.