young drivers' insurance

cover me!

Young drivers face an uphill battle in obtaining affordable insurance. We take a look at a scheme that promises just that. It's certainly innovative.

Teenagers today have it so easy. A world of information is at their fingertips via the internet, A-levels only require a vague approximation of the correct spelling of your name for a pass and they'll never know the misery of waiting half an hour for a game to load from a cassette tape only for your computer to blink RUNTIME ERROR at you.

Just when I thought young adults led some sort of charmed existence I recoiled in horror as a colleague's 17-year old son attempted to insure himself on a bottom of the range Vauxhall Corsa. Ashen faced, he hung the phone up and asked where he was going to find £5,000. I remember feeling aggrieved at having to hand over £400 for cover on my Alfa Romeo Giulietta 2.0-litre when I was that age. This situation just seemed ludicrous and one company has tried to offer a solution.

Insurance underwriting isn't a matter of guesswork. The insurance companies have a solid stack of statistics that demonstrate that younger drivers are more likely to crash within their first two years behind the wheel, spend a greater percentage of their time than is the norm driving at night, when risks are higher, and they are also sharing the burden of paying for no win, no fee, legal costs. But therein lies the dilemma. If premiums are so high that young people get the bus instead, the insurers make nothing. Young Marmalade is a scheme that aims to supply an insured vehicle to young drivers. But only the right sort of young drivers.

As part of the Intelligent Marmalade insurance scheme ( , Young Marmalade also uses in car technology which monitors speed, acceleration, cornering and braking. If any of these are taken to excess it increases the insurance risks. The driver is able to review their journeys to see how they are driving and if they are a greater risk the insurance company will commence an intervention process, which could lead to an increase in premiums or ultimately cancellation of the insurance. This means that good drivers get to pay insurance for the way that they drive and not base it on all the other poor and inexperienced drivers in their age group. This also has safety implications as if a young driver knows that they are being watched and could face tough sanctions, they will drive more safely and economically. The insurance company also knows what type of risk the driver is when it comes to renewal of the policy. Drive safely and it's a win-win.

Young Marmalade works hand in hand with vehicle manufacturers to create a package that works and is affordable for many young drivers when compared to alternatives in the market place. Let's take that Vauxhall Corsa as an example. Rather than fork out for a used Corsa and then find the insurers trying to gouge you for £5,000 in the first year with no guarantee that this figure will shrink next year, Young Marmalade will source a brand new Corsa and use the manufacturer's support as a cash back, which can be used to pay for the much reduced insurance premium. It's all very clever and the net result is that younger drivers pay less for cover, get a car with up to date safety features and also get an incentive to drive responsibly.

That last issue shouldn't be underestimated. I look back at the way I first drove with a mix of amusement, horror and embarrassment, as progress was normally full throttle everywhere, usually firmly stuck in third gear. How I never wrapped my car round a tree is a source of vague wonderment. Any encouragement to drive in a more sensible fashion can only be applauded. Of course, you could argue that the threat of loss of a valuable no claims bonus does that already but during a 12 month trial Young Marmalade's insurance underwriters measured the accident statistics of Young Marmalade drivers against young drivers in general. In the first year, a staggering 15.91% of the control group of young drivers were responsible for causing accidents, which was in line with known statistics. This compared with just 6.07% of young drivers on the Young Marmalade drivers scheme. In other words, young drivers better than halve their accident risk by choosing Young Marmalade.

Nick Moger, founder of Young Marmalade, is in no doubt that something game-changing needed to be done. The AA Index records a massive 82.1 percent increase in Third Party Fire and Theft insurance policy prices over the 12 months up to March 2011. In general, he said, the increase in premiums over the past year was the biggest ever recorded by the AA Index since it started in 1994. "Coupled with the high price of fuel, the situation for young drivers is becoming increasingly untenable," said Mr Moger, highlighting a recent report by business advisers Mazars that warned that young driver premiums look set to soar by 50 per cent in the near future, effectively making car insurance unaffordable for people in this age group.

Driving should be about freedom but with freedom comes responsibility. Some kids catch onto that quicker than others. For them, covering themselves with Marmalade could well be the answer to a seemingly intractable problem.