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For young adults, obtaining a drivers licence is a milestone, but for parents it's a big headache, especially if they are driving your car. If somebody younger than 25 years is a regular driver of your vehicle, adding them to your car insurance policy is necessary. Unfortunately, this will usually significantly increase your premium.
Car insurance for under 25s: premiums and excess
It is expensive to insure under 25s because insurers flag the 16 to 25 age bracket as high risk. This is due to young drivers being more likely to take risks and make poor decisions on the road than older drivers. Insurance for young drivers alone tends to retail at around $1650 a year and attracts a higher excess than older drivers.
Most car insurers require a $500 excess for older drivers but if you want to add an under 25 driver to your list of agreed drivers then your excess will increase.
There are other precautions you can take to reduce the increase resulting from adding an under 25 to your policy. Fitting the car with an immobiliser, full metal jacket and steering lock and having access to off street parking overnight will usually reduce your premium. Insurers also look favourably upon under 25s who have taken defensive driving courses.
Under 25s and your no claim bonus
Some insurers allow one claim before you lose your no claim bonus, others are not so charitable. If your young adult has an accident and you have to make a claim your no claim bonus may be history. However, in the event of a minor accident, it may actually be cheaper to pay for repairs yourself, as the high excess for young drivers can sometimes work out to be more expensive than the damage.
