Most young people want to be able to drive as soon as possible and probation clients are no exception. The only snag is that many start driving a bit earlier than is allowed, without the legal niceties of a licence or insurance and often in a vehicle not belonging to them and having been TWOC'd. As a result, many will have accrued quite a string of motoring offences by the time they are able to drive legally, only to find that obtaining insurance is nigh-on impossible due to the premiums quoted. Typically I've heard of figures in excess of £1300 for a bog-standard fiesta. Now it will not come as a great surprise to many when I reveal that this serves as a considerable disincentive to bother with insurance at all, but not necessarily a deterrent to driving. Just out of idle curiosity, or when preparing the inevitable PSR, I routinely ask young people if any of their mates have car insurance. The answer is invariably a bemused 'no'.
Now what this clearly indicates to me is that many thousands of young people are prepared to regularly drive without insurance and take the risk of being pulled over by the police. Now they, and we, all know that the chances of being stopped have increased dramatically with the advent of Automatic Number Plate Recognition equipment both in police vehicles and via roadside cameras, all linked to a central computer data base. I guess this is one reason they often don't bother to register change of ownership, or provide fictitious details and take a gamble on being 'pinged'.
This is not a good situation for anybody, least of all other road users. I think the time has come for a more intelligent and enlightened approach to the problem, involving a carrot in addition to the stick. If the aim is to get everyone to drive legally, I think we must set up a special scheme that delivers affordable car insurance to this target group. Whilst on such a scheme, young drivers would get used to the notion of paying for insurance and have the incentive to drive responsibly and accrue some no claim discount, ready for eventual transfer to the open insurance market.
I believe an appropriate historical precedent to consider is the way illegal motorbiking has been dealt with in many parts of the country over the years. As an alternative to a punitive approach, probation officers, police officers and others were typically involved in setting up schemes where young people could ride legally; be properly supervised and in the process learn to be responsible bike users and eventually gain a licence. I think anything is worth trying, rather than allow the present situation to continue with some people having very little hope of ever getting insurance at a reasonable price. I concede that this may not be a good time to be suggesting something else to fund, but it just might prove to be cheaper in the long run for all of us.
Funnily enough you have ventured into the field which is normally my job (Though not at the moment thanks to this recession, if anyone needs a specialist in insurance and insurance regulations drop me a line) The problem with uninsured motorists is not confined to your clients but is also widespread amongst people who should know better (They rationalise it along the lines of the insurance costs more than the car is worth so why bother, ignoring the fact that the insurance is there to pay out for injury or damage to other persons or their property) Also with a fixed penalty notice for driving without insurance being £200 (Is that right?) it can be cost effective even when caught.
ReplyDeleteYou would also do well to bear in mind that most insurance companies will not provide any insurance to anyone with a criminal conviction and some will not provide insurance if you have even received a caution (In the industry we call it "moral hazard")
There are some possible solutions which I will outline.
A general accident fund. This is the approach which has been adopted in New Zealand. This pays out for ANY accident, be it motor, work, medical malpractice. This is well liked in New Zealand as it means you do not have to buy any liability insurance, it is also cheaper and quicker to run than having to battle through the courts (Note that Kenneth Clarke remarked how little they had to spend on legal aid in New Zealand.
Insurance on registration, you register your car, you pay your registration fee, you get your number plates from the registry, your liability insurance is included with the number plates. This is the system in Switzerland and the Provence of Quebec in Canada, the Quebec system also covers you for damage or theft of your car as well.
Fuel surcharge, when you buy fuel for your vehicle, you pay a surcharge which provides liability insurance. This has been proposed in several States in the US.
Pool Risk, this is in operation in several States in the US. Should you be deemed to be uninsurable by a certain number of insurers, you will be placed in the State risk pool, you are then allocated an insurance company by the risk pool (based on the insurance companies share of the market) who will then provide the minimum level of liability insurance.
Each has there own merits and problems, none will go down well with the "Daily Mail" but I hope I have given you something to think about.
Paul - thanks for that. It just goes to show how blogging can be dangerous with experts out there actually reading what you write!
ReplyDeleteI've always thought that third party cover attached to the Vehicle Excise Licence ought to be a consideration. Then if some one has taxed their car then they are also 3rd Party insured. If they want to add the Comprehensive bit on as well, then that's available on the open market.
ReplyDeleteI realise this won't get the scrotes who never bother with the VEL but it will catch a number of non-insured drivers. Someone else can come up with an idea for the other bit.
It shouldn't be hard, despite the powerful insurance lobby group.
Hey,
ReplyDeleteYou've also wandered a little into the field of economics. It's important that - even for third-party insurance - that more dangerous drivers should be charged more for their insurance, both to pay for the costs of the risk they generate (accidents a larger group of them will cause) and to as a disincentive for them to continue their dangerous behaviour (driving at all). The prices currently charged (although very high - I was a young male, albeit with a clean licence, once) must be reflective of the real costs to the insurance company. If they were making a 50% profit off these people, another company would come in, cut the premiums in half, add 10% and still be a successful business. Insurance is so competitive (see any price-comparison website for proof) that its hard to believe some monopoly or cartel-like features of the market are distorting the price.
Additionally, any kind of subsidy for car-drivers is bad news because it disproportionally benefits the wealthy (in this case, those who can already afford cars and their other expenses). Assuming some kind of travel-allowance is required to help people transitioning into mainstream society (and I'm prepared to believe your expertise that it is), then it should be transport-mode independent.
There's an argument; however, to be made that driving without insurance should be taken out of the field of motoring offences (that way, those who commit the offence could buy future insurance at the same price as if they hadn't). Unlike speeding (for example) which is probably indicative of future behaviour insurance companies need to price for, driving without insurance is corrected as soon as you have insurance. So insurance companies don't need to price it in. Of course, we then need an alternative penalty mechanism to ensure people do purchase insurance. Anyway, if this is the issue, it should be addressed directly by amending the appropriate statutes.
Rather than give a wide range of reasons why something shouldn't be done, I have an alternate and related proposal. Pay As You Drive insurance is paid by the mile using a GPS tracker in your car. Depending on the details, it can even price for time-of-day, location of journey and so on. Lack of economies of scale, and the cost of the equipment makes it presently uncompetitive. But under the sort of system I imagine you're considering, a publicly-run option for insurance, restricting type of trip and time of day, and appropriately monitored, might manage to bring the cost of the risk down to an affordable price for the motorist concerned. It might even be reasonable for the government to pay for the equipment (in the same way as it pays for electronic tagging of criminals), as a guarantee of future compliance with appropriate motoring law.
Jonathan
Jonathan - many thanks for your very thorough comments - I guess there's a lesson here - the subject I know least about has generated the longest and most comprehensive replies!
ReplyDeleteHey,
ReplyDeleteIt's a common thing. Everyone stands on top of a little peak of knowledge. If your topic is right around your peak, there's not much others can contribute. But when the topic is a bit more general, we can communicate by shouting from one peak to another, and maybe come to some useful conclusion(?)
Anyway, thanks for the reply. If this blog becomes as popular as I expect, you won't be able to do that kind of thing much longer...
Yours,
Jonathan