The car insurance industry is a well oiled machine that has had nearly a hundred years to develop and evolve. This means that the people selling you the policies know all the ins and outs. Well maybe not the sales person you talk to on the phone but you can be assured that there is an army of analysts, adjusters and underwriters finely tweaking every type of insurance you can get for your car. So let us take at look at why temp cover under 21 is so difficult to find.
The insurers base there prices, on the whole, on the potential cost to themselves rather than the cost the market will bare. As a result a sort of inverse costing has evolved. This means that the less likely you are to be able to afford a policy the more expensive it is likely to be. This is an unfortunate truth about the car insurance market.
Every policy that is sold is weighted based upon different factors. These factors are based on decades of information that the insurers have accumulated to help them decide which driver is more likely to be a liability. By liability they mean the likelihood that you are going to cost them money in terms of making a claim.
The more likely that a person has of making a claim the more expensive that policy has to be. Remember a claim can be made by you on your own policy or by a third party on your policy. Incidentally third party injury claims in the UK are currently one of the biggest reasons for such high insurance prices.
In the age group weighting a driver who is 21 or under is more likely to have an accident and therefore claim. If you are a male driver in that age group this pushes the cost of a premium up even further. Young women drivers are less likely to have an accident than their male counterparts.
With an annual policy the insurer can spread the risk because a full years worth of premiums is being paid to offset any potential claims cost. However with a temporary car insurance policy the insurer may only potentially have as little as one days premiums. This means should there be a claim the insurer will have lost a lot more money. Remember an accident will still result in the same financial loss no matter what type of policy you have.
To this end most if not all providers of temporary cover have ceased providing policies to under 21 year olds. They are unable to get their underwriters to underwrite these policies. You can however get temporary car insurance under 25 years of age and as young as 21 with some providers.