Car insurance premiums are calculated according to the likelihood of the driver making a claim. And the statistics used by insurers show that younger drivers – those under 25 – are more likely to be involved in an accident than older people.
What’s more, the data reveals that these accidents are likely to be more serious and more expensive to resolve than accidents suffered by those above this age.
Put those two factors together – frequency of accident and cost of claim – and you have a major reason why car insurance for young female drivers tends to be more expensive than the average rate for all drivers.
Same price for men and women
It is likely that you will find that the average cost of car insurance for young women has increased over the past 12 months. One reason for this may be the effect of a ruling which came into force on December 21, 2012, which makes it illegal for insurers to take a person’s gender into account when calculating how much to charge.
Prior to this point, insurers referred to statistics which showed that young men were much more likely to be involved in accidents than young women. But the European Court of Justice’s Gender Directive outlaws this practice. Insurers can no longer distinguish between men and women simply on the basis that they are male or female, meaning an end to cheaper car insurance for female drivers.
This development has prompted the insurance market to explore other ways in which to reward safer drivers and thus, as a consequence, offer cheaper car insurance for young women who demonstrably present a lower risk profile.
The black box option
This has seen the growth of black box insurance policies. These work by having ‘black box’ technology installed in the car which monitors the driver’s behaviour, taking into account acceleration rates, cornering and braking, as well as the time of day most driving is done, and the types of road used.
This information is used to determine whether the driver deserves to be rewarded for safer driving with a lower premium. Rates are normally reassessed each quarter, with changes reflected in subsequent monthly direct debit payments, or at annual renewal.
Of course, the telematics analysis may reveal that the driver is actually more risky than first anticipated, which could lead to the premiums being reviewed upwards.
A variation on this theme for young women looking to save money on their car insurance costs is pay as you go car insurance. Here you are effectively charged for the number of miles you drive.
The logic of this approach is simple: the more miles you drive, the more likely it is you will be involved in an accident. Conversely, the fewer miles you drive, the less risk there is of you making a claim on your insurance. So young women who are able and willing to reduce and limit their mileage could reduce their premiums via this sort of policy.
Keeping the cost down
Another major factor that determines the cost of car insurance for young female drivers is the car they drive. All cars are allocated by insurers to one of 50 car insurance groups for premium calculation purposes and the general rule of thumb is that, the higher the group number, the higher the premium
Insurers can no longer distinguish between men and women simply on the basis that they are male or female
This means young women might prefer to opt for a car from a lower group so as to reduce their insurance costs. Keeping the car in a garage or on a driveway at night will also help to keep a lid on premiums, as will fitting security devices, such as an immobiliser, alarm and tracking device.
It is also best to avoid making any modifications to the car as these could trigger a premium increase. If you make modifications, however minor, be sure to tell the insurer or you could risk invalidating your policy.
Insurers might also reduce the cost of car insurance for young female drivers if the policy holder has taken the Pass Plus course, which educates on safe driving techniques. You can find out more about it from one of our news videos.
Another option that might help deliver lower premiums on car insurance for young female drivers is to include named drivers on the policy. This is when one or more older and more experienced motorists is added to their policies as named drivers.
This helps because the insurer will assume the car is being driven for at least part of the time by someone who is a better insurance risk than the young female driver. However, this tactic should not be confused with the illegal practice known as ‘fronting’. This is where the car is insured in the name of an older, more experienced driver to achieve a lower premium, even though the young female remains the main driver in practice.
Fronting is to be avoided at all costs as it could invalidate a claim if the insurer found out. It could even result in a court case, and all those involved would certainly encounter difficulties in obtaining insurance in the future.
The crucial tip when looking for cheap car insurance for young women drivers is to shop around. If you use the quotation facility at MoneySuperMarket, you have access to over 100 insurers, giving you a range of quotations from which to choose.
You can find more ideas on how to reduce the cost of car insurance for young female drivers on the MoneySuperMarket money saving tips page.
Alternatively, you will be able a more dedicated examination at the car insurance market for people in your age band on our young drivers car insurance guide.