Motor insurance and age

Motor insurers use age to price cover

Motor insurance prices can be set using a variety of rating factors. These factors include the vehicle’s condition, its location and who is driving it. The latter can have a significant impact on both the likelihood and cost of claims being made by policyholders.

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Motor insurance premiums and claims influenced by age

Chart One shows the percentage customers who claim per policy, the average cost to file a claim, and the average premium for different age group for private motor insurance in 2020. This chart is for individuals aged 18-20, 21-25, and so forth, and covers five years until the age of 90. All policies that cover people over 91 years old have been combined.

There is a clear correlation between premiums paid, claims frequency and cost for all age groups. Premiums rise for older and younger drivers. Premiums drop significantly for drivers aged between 31 and 75 who have claims frequency as low at 4.7% and claims as low at PS2,948.

Drivers aged between 66-70 are the most financially secure. They pay PS279 for car insurance. This is less than a third of what 18-20 year olds spend on average. These drivers are not the most likely to have low claims. Drivers between 51-65 have lower claims than those between 51-65, but drivers between 66 and 70 have the lowest frequency of claims.

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Car sharing and insurance

Insurance companies are committed to supporting new mobility options, such as car sharing and other shared transportation. Individuals and businesses can share a car, which allows them to access a vehicle without the need to purchase one. This will help build a sustainable transport system and meet the Government’s goal of zero carbon emissions by 2050. Car sharing members can find car sharing vehicles on the streets at convenient locations. They are available for hire by the hour and day.

There are many car sharing options:

National car clubs – These clubs operate across the UK. They include Zipcar Enterprise, Co-wheels, and Ubeeqo. Collaborative Mobility UK, the charity that promotes shared transport such as car sharing, accredits car club accreditation. More information can be found here.

Community-led car clubs – These clubs tend to operate in areas with low population and less urbanization than larger national clubs. A community group can have their own car(s) and manage their local club, taking care of everything such as bookings, driver checks, maintenance and billing. You can find examples of community-led car clubs on the CoMoUK site.

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Peer-to peer car sharing – Many platforms allow people or organizations with used vehicles to rent them to others by the hour. These include GetAround and HiyaCar as well as Karshare, Turo, HiyaCar and Karshare. The vehicle’s owner is responsible for its insurance, but the peer-to peer operator’s commercial insurance will cover the ride when it is shared. Owners of cars are encouraged to notify their insurance company that their vehicle is being shared on a sharing platform. Further details can be found on the CoMoUK website.

Car sharing is where people share their car. Ride sharing allows car owners to share their journey with others. In the UK, there are many ride-sharing platforms like Liftshare, BlaBlaCar and GoCarShare. Drivers can only share the cost of their journey. They are not permitted to make any profit.

The ABI supports ride-sharing platforms and car sharing. ABI motor insurance companies have agreed that your coverage will not be affected by passengers contributing towards your journey costs (including fuel and vehicle depreciation) as long as the lifts are provided in vehicles with eight or less passengers. This does not apply to passengers you carry or if you earn a profit on payments received.

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If you’re a part of a ride-sharing or car sharing program, we recommend you carefully read the terms and conditions and talk to your insurance company to ensure you have the correct level of coverage.