Young driver insurance premiums could be capped at £1,200 if the proposal is passed
The UK Government is considering whether to cap insurance premiums for young drivers.
If the proposal is passed, young drivers throughout the country will pay no more than £1,200 for their car insurance but the move could mean that other motorists are left worse off.
Parliament is set to discuss whether to limit the price young drivers have to pay for their insurance premiums, after receiving a petition urging the Government to introduce a price cap for young drivers with more than 180,000 signatures.
Those who signed the petition are demanding that premiums for young drivers aged 18-25 are capped at £1,200.
According to past research, young drivers in the UK are being charged, on average, around £2,013 for a year’s insurance, with many paying out much more.
At the same time, the Association of British Insurers (ABI) reckons that the average fully comprehensive insurance policy for all drivers in the UK costs around £462.
The proposal follows a recent announcement by the Government concerning plans to change personal injury payouts, which will more than likely hike premiums for younger drivers by almost £1,000. However, the Chancellor Philip Hammond has ordered an inspection of the plans before they are passed.
The price cap would definitely benefit young drivers across the country, but according to the British Insurance Broker’s Association (BIBA), other motorists could end up being worse off as a result, with higher premium prices for many.
Rather than capping the price of premiums for young drivers, the organisation would prefer it if they were simply excluded from the Insurance Premium Tax, which is set to rise in June this year from 10 to 12 per cent.
“We have engaged insurers in this process, so that they can have confidence that additional measures will make a real difference that can be rewarded with lower premiums,” said a Government spokesperson.
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