What are the cheapest insurance policies for new drivers?

By Martin Pretorius

As far as grudge purchases go, car insurance is right up there with dental work and pre-paid electricity – nobody wants to buy insurance, but it's a necessity for every road user. This matter gets even more unpleasant for young drivers, because the insurance industry isn't exactly known to look too kindly upon young, inexperienced drivers. Here's what you could expect from your insurers.

 Why get insured in the first place?

Comprehensive insurance is a necessity for all drivers, as it covers all the bases: theft, fire, accident damage for you and any other car involved in your accident, protection against flooding and hail damage, and third party liability. If you really can't afford comprehensive cover (and drive a fully paid-off, cheaper car), you could opt for limited car insurance (which removes the accident coverage), but this is nowhere near enough to cover a financed car.

 Not only do you want your car to be comprehensively covered, but you actually have to maintain comprehensive insurance on any car still bound by a finance agreement. If you stop the insurance on a financed car (which is against the law, by the way) and the car gets stolen, damaged or written off, you will still have to settle the outstanding finance amount with the bank. Eventually, you'll end up paying off a car which isn't even on the road anymore. Rather be safe than sorry, and maintain the best insurance you can afford on your car.

 But it's very expensive!

As a new driver, you have to start creating your insurance history from scratch. The insurance companies know nothing about your driving habits and likelihood of you filing large claims, but they do know that new drivers are far more likely to lodge big insurance claims. How do they know that? Because history has shown young drivers to be the group which poses the largest claims risk, mostly due to inexperience and poor driving habits. It gets even worse if you drive a high-risk vehicle, and you pose the highest possible risk if you're a young male.

 Let's take Mike as an example. A 19-year old male with no prior insurance history, he drives a 2012 VW Polo Vivo 1.4, which is parked in a controlled-access garage at night. His online insurance quotes vary between about R970 and R1 120 per month, with an excess of around R3 200. If Mike's name was Michelle but otherwise posed exactly the same risks (19 years old, one-year-old driver's license, access-controlled parking, and the same Polo Vivo), that premium would drop by between R120 and R160 per month (depending on the insurance company). This proves that insurers take a very dim view of the driving habits of young males – must be all that youthful exuberance!

 So what am I to do?

Shop around. Just like any other business, insurance companies still need your support, and if it means that they need to undercut their opponents to sign that contract, they will. To further improve your risk profile, stop being a young male.... Just joking, there's nothing you can do about that.

 But you could opt for a car with a lower theft risk (Vivos are quite popular among the long-fingered), add an insurance-approved tracking device, and look for an insurance company which also monitors your driving style. Once they see that you're a considerate, careful driver, your premiums should come down soon enough. But in the mean time, just hope you don't need to claim from your insurance – the last thing you, as a young driver, need right now is an even less favourable risk profile...