INSURANCE premiums may have witnessed a slight respite recently with the introduction of legislation to cut down on so-called ‘ambulance chasers’, but for young people the nightmare of the first year’s premium is still a crippling burden.

Parents often help with the cost, and high-profile insurance broker R K Harrison has come up with a new insurance portfolio idea that the firm says can significantly mitigate the financial impact of a new driver’s insurance premium. Not only that, but company bosses have joined forces with a long-standing motoring institution that’s well placed to help reduce young drivers’ premiums.

The Institute of Advanced Motorists (IAM) has stepped forward in partnership with R K Harrison to try to reduce the burden on young drivers with a revolutionary new technique – called helping them to avoid crashing. After all, eliminating crashes would all-but eliminate the premiums as well as saving many young lives every year.

It works like this: a parent takes out a ‘family’ insurance portfolio covering a number of different policies including cover for their child’s car. It’s completely legal and the young driver can build up their own no-claims discount. A ‘black box’ monitoring system is installed into the car to measure speed, acceleration and braking, plus a GPS location logger to correlate driving inputs to road types.

Then, within a month of the policy’s start the youngster must take a specific half-day course with an IAM instructor, who goes through various key – and 21st century relevant – aspects of staying safe behind the wheel. There are theory elements and practical on-road sections too.

Katie Small, director of R K Harrison, explains. “Telematics isn’t a new idea into the market,” she says during an extended telephone interview, “but unlike any other telematics solution that just monitors the driving, we are giving young drivers the tools to have the accelerated experience that they wouldn’t have by only taking normal driving lessons and a driving test, [like] real-life scenarios, consequences, cause and effect, and in that the IAM are leaders in their field.

“They can also respond very quickly to make sure that the courses are done very quickly, but it’s really to give the young drivers the tools to be able to stay safe rather than just penalising them for bad driving when they haven’t actually been taught how to do it properly.”

Every month, a report on the young driver’s ‘safety performance’ is sent to them and their parents. It’s hoped that the family pressure will help to encourage more considered driving. Ms Small says that the family portfolio should work out at between 10% and 30% cheaper than an equivalent product outside of this scheme, reducing the impact of that first year’s car insurance.

“Different parts of the policy will make up different elements of the discount,” says Ms Small, “and while there’s no such thing as a ‘standard’ risk, all of the test studies we’ve done so far have saved between 10 and 30%.

“What we would see is a 20% reduction in what people were paying in year one, so in year two it very much depends on the [previous year’s] driving. It will come down, especially because we can actually apply science to it; we’re not just using computer-generated numbers.”

Neil Grieg, director of policy for the IAM, is on board with R K Harrison’s aims. “Your average young driver will probably have learnt to drive in a town or city in daylight,” he notes. “They haven’t gone onto rural roads; they certainly haven’t gone onto motorways and they haven’t built up that experience yet. What we’re trying to do is give them a little bit of extra experience.

“Young drivers often don’t recognise hazards until it’s too late. Sometimes they get away with it because their reactions are quick, but often they can find themselves getting into situations.”

Accident rates among young drivers, although steadily declining in line with all other age groups, are still a chief concern for the IAM. “Our biggest road safety issue is young drivers; those first six to 12 months of solo driving, and we want to be doing something proactive,” says Mr Grieg.

“What tends to happen is that when drivers get past that first 12 months and start to build up no-claims discount and a safe track record, insurance companies start to reduce their premiums anyway. They need the help in those first 12 months.

“If they don’t get priced off the road then they could get the chance to build up experience. There’s research in Sweden that shows that those drivers that had the most hours out there end up as the safest drivers in all seasons.”

Ms Small agrees that safety is the top priority for everyone. “Parents’ primary concern is their children’s safety, and they also want to receive value for money. [We] can put the two together and have it cost less than customers’ current solutions.

Love them or loathe them, telematics boxes are becoming a necessary piece of kit for young drivers but they don’t have to be a big deal, as Mr Grieg explains. “The thing about these black boxes is that drivers quickly forget that they’re there and just drive normally, and then get the feedback afterwards.”

Ms Small adds: “We want to be promoting good behaviour rather than penalising the bad.”

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