Affordable Automobile Insurance

The revolution that came from uSwitch.com report, that more and more adults are using their parents’ insurance policies, is no news at all for most of the parents. In some cases, they are buying insurance cover for their older children simply because the young adults are main driver of the car. If the insurance cover continued to be in the name of parents, it would have been illegal and insurance company could even refuse to pay the claim in the case of an accident.

In the face of rising costs, people can still find some creative ways of saving on insurance rates. The premiums for third party fire and theft are still lower than other comprehensive insurance covers. This strategy usually works when you are driving an older vehicle.

The type of car being driven on the road by you, is the single biggest factor which decides your car insurance premium. Insurance companies believe, if your car engine is on the smaller side, the drivers are at less risk of an accident. Obviously, if you are buying a sports car with a powerful engine, you would be tempted to drive faster thereby increasing chances of car crash. It’s best to go for a smaller engine if you are a new driver. In this way, you can build up your driving record (keep it as clean as possible). If you buy a powerful sports car later, insurance companies would accept your clean driving record and offer you reduced insurance rates.

If you are taking proper precautions such as fitting your car with alarm and park it off the road at night, insurance companies will reduce your insurance rates. Try to make an upfront payment instead of paying monthly premiums. Monthly premiums are like financial agreements in which the insurance companies’ would be charging you interest rates along with the one time premium that you would otherwise have paid.

About 10 million drivers so far have named a second driver on their insurance policies. About 2.5 million of these are their own children and their average age has increased from 25 years to 31 years. These figures indicate to what extent the young adults are relying on their parents for financial support, the main reason being the current economic meltdown.

Earlier research had suggested more adults in the age group of 18 to 24 years were returning to live with their parents or have postponed plans to move out. While these young adults are staying with their parents for longer than usual, they are also utilizing their parents’ insurance policies for longer because of lack of affordable automobile insurance options.

Young drivers are required to pay higher insurance since they belong in high risk category. They are, therefore, finding a way around the problem by getting themselves named as second driver in their parents’ insurance policies. It is a legal practice for young adults to be named as second driver on their parents’ policy. It’s just that the child in question should not be the main driver of insured car.

Young drivers are increasingly finding it difficult to keep their cars on the road due to increasing petrol prices, insurance premiums and other costs. It can be concluded that many are indulging in practice called “Fronting”. In this practice, young adults buy their own cars under their own name but the insurers are told the parent is the main driver. As recession has unfolded on the economic horizon, fronting cases are on the up. The cost of this illegal activity is ultimately borne by consumers themselves.

Many young drivers are taking this cost cutting to another extreme. They are not getting insurance for their car at all. Others are taking the middle path and they are opting for the more affordable “Third Party Cover”.