Car insurance for young drivers
Saturday, May 26th, 2012 | Religion & Politics, Thoughts
Recently, there has been news coverage regarding the cost of car insurance for young drivers.
Everyone is asking how we can bring down the price for young drivers. Nobody seems to be asking whether the price is legitimately high because that is just how much it costs, but lets ignore that obvious question and assume that the prohibitive costs for young drivers are an issue that needs to be addressed.
If so, one easy way to bring down the cost for young drivers would be to ban insurance companies from discriminating based on age.
What way, everyone would pay the same regardless of how old they were. Of course, insurance companies would still be free to charge people higher premiums based on their driving history – if you’ve had an accident you pay more, if you have no claims you pay less. But it stops the companies charging people more just because of their age alone.
You can argue that it makes sense to make young drivers pay more because they are more likely to have an accident, but this is not a fair system. Why? Because it is entirely unfair to the young drivers who do drive safely. Why should they pay more for other people’s reckless behaviour?
This is almost the same situation as it was with insurance companies discriminating based on gender, and this has now been recognised by the EU and will be illegal from the end of this year. You can’t charge someone more for car insurance because of an arbitrary characteristic, such as gender or race.
People get angry when they think about young drivers costing them more money on their insurance premiums. But this isn’t the case! Young drivers don’t cost you any more money. Only reckless drivers do. A young driver who never crashes and doesn’t claim on their insurance doesn’t cause your premiums to go up. Whereas a 50-year-old who does crash, does cause your premium to go up. To blanket blame an entire demographic because of the actions of a minority is both ludicrous and morally wrong.
The one argument I think might carry some weight is the argument that it is fair to charge young drivers more because we’re all young at one point and then we all get old, so everyone gets the same fair deal in the end. However, I’m not sold on this being a better solution than banning age discrimination altogether, in which everyone gets the same fair deal, all the time.
Recently, there has been news coverage regarding the cost of car insurance for young drivers.
Everyone is asking how we can bring down the price for young drivers. Nobody seems to be asking whether the price is legitimately high because that is just how much it costs, but lets ignore that obvious question and assume that the prohibitive costs for young drivers are an issue that needs to be addressed.
If so, one easy way to bring down the cost for young drivers would be to ban insurance companies from discriminating based on age.
What way, everyone would pay the same regardless of how old they were. Of course, insurance companies would still be free to charge people higher premiums based on their driving history – if you’ve had an accident you pay more, if you have no claims you pay less. But it stops the companies charging people more just because of their age alone.
You can argue that it makes sense to make young drivers pay more because they are more likely to have an accident, but this is not a fair system. Why? Because it is entirely unfair to the young drivers who do drive safely. Why should they pay more for other people’s reckless behaviour?
This is almost the same situation as it was with insurance companies discriminating based on gender, and this has now been recognised by the EU and will be illegal from the end of this year. You can’t charge someone more for car insurance because of an arbitrary characteristic, such as gender or race.
People get angry when they think about young drivers costing them more money on their insurance premiums. But this isn’t the case! Young drivers don’t cost you any more money. Only reckless drivers do. A young driver who never crashes and doesn’t claim on their insurance doesn’t cause your premiums to go up. Whereas a 50-year-old who does crash, does cause your premium to go up. To blanket blame an entire demographic because of the actions of a minority is both ludicrous and morally wrong.
The one argument I think might carry some weight is the argument that it is fair to charge young drivers more because we’re all young at one point and then we all get old, so everyone gets the same fair deal in the end. However, I’m not sold on this being a better solution than banning age discrimination altogether, in which everyone gets the same fair deal, all the time.