Young drivers car insurance

Young people driving with insurance

Under 25? You might be wondering why your car insurance premium is so high. Well, young drivers or those new to the road generally face a higher premium or excess because they are statistically riskier drivers.

If you're feeling tempted by a sneaky work-around to minimise the extra insurance costs, we're here to say it's probably not worth it.

Some junior drivers recruit parents to take ownership of their car insurance and list themselves on the policy. It may save some dough, but it could jeopardise a family member’s no claim bonus if you’re the cause of an accident.

Not to mention, you’d be missing out on building up loyalty discount and no claim bonus of your own. So, let’s explore other car insurance fees and features you need to be aware of as a young driver.

How can I get added to the family car insurance?

The family member that owns the car insurance policy will have to do the calling, not you. 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 insurance provider your age, gender, licence type, car type (if you're investigating a multi-car policy) and any modifications it's had, plus where it’s usually parked before getting an idea of how much the premium and excess will be.

Standalone car insurance options for young drivers

If you’ve been driving everyday since you were 17 and you’re now 23 years old, that’s six years driving experience. And if you have a pretty good track record when it comes to safe driving, then you could be entitled to car insurance premium discounts. 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.

What should I know when taking out my first car insurance policy?

Your premium is likely to be more expensive compared to a driver with a good driving record and a full licence. Here are some important car insurance factors you'll want to consider as a young driver.

  • 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 insurance company may void your policy altogether. 

  • Keep your driving record 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 heaps every year. You can start this research mission by checking out the best car insurance policies as crowned by Mozo. The list includes options that are ideal for young drivers.

Common car insurance exclusions for young drivers

For drivers of any age, there are a bunch of things not covered by car insurance, including things like mechanical failures, worn tyres and rusting. But let's get into the main exclusions for younger drivers right now.

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.

For now, let's take a look at what actions might void your cover depending on the type of licence you hold while you're a young driver.

Learner Driver

  • Driving 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 provider with the type of car you drive

P1 Licence

  • Driving with any amount of alcohol or illicit drugs in your system.
  • Exceeding permitted speed limit
  • Misleading your insurance company 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 Licence

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

How to choose a car insurance policy: Price vs features

It’s one thing to simply compare prices, and another to compare value for money – and that's all about what your car insurance covers you for and the dollar limits on that coverage. 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. With most comprehensive policies you’ll have to opt-in and pay extra for roadside assistance, or take this out with an entirely different company.

Optional car hire
Many policies will cover you for a certain period or dollar amount if you require alternative transport after a not-at-fault accident or theft. Others will include post-accident hire car as an optional extra, whether or not you were responsible for the incident. 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 your insurance provider) and you insure it for $20,000, then that’s an agreed value. Market value is the amount the insurance company deems your car could be sold for at the time you take out the policy. Not all policies will offer you a choice between these options, and picking one over the other could cost you more. Read more about the details of this feature in our guide market vs agreed value car insurance.  

Installment payments
You're usually asked to pay for your annual policy in one lump sum but some insurance providers will also offer the option to pay in monthly or even weekly installments. Some providers offer this at no charge but with others it comes with a processing fee, but your payments may be easier to manage. 

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.

If you want to investigate comprehensive options, check out the policies below.

Compare Comprehensive Car Insurance Policies - rates updated daily

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*Terms, conditions, exclusions, limits and sub-limits may apply to any of the insurance products shown on the Mozo website. These terms, conditions, exclusions, limits and sub-limits could affect the level of benefits and cover available under any of the insurance products shown on the Mozo website. Please refer to the relevant Product Disclosure Statement and the Target Market Determination on the provider's website for further information before making any decisions about an insurance product.

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