'M&S scrapped my insurance – just because I passed my test'
Learner drivers pay a packet for cover – but they get really clobbered if they dare to drive well, says Simon Read
Saturday 11 September 2010
Passing your driving test is usually a time to celebrate. But for Independent reader Mike Ford, his joy was cut short when he passed his test last month because his insurer suddenly withdrew his cover. The reason? Marks & Spencer said it didn't want to insure the 17-year-old any more because, as a qualified young driver, he was too much of a risk.
M&S isn't alone in penalising young people for being successful learners. Our tables below show that most insurance providers ramp up the cost of cover, but few go as far as M&S in simply leaving their customers uninsured.
The move angered Mike's father, Rob. "I find it totally reprehensible that a company of M&S's standing should take on a provisional driver in full knowledge that they would cancel the policy the minute he passed his test, with no prior warning," Mr Ford said.
"What sort of signal does this send out to young drivers and their parents? Insurers warn of the dire consequences of a driver being found to be fronting [when someone other than the main driver is declared as the policyholder]; yet they treat honest policyholders with contempt."
It is hard not to agree with him but M&S washes its hands of any responsibility. A spokeswoman said: "M&S Money does not underwrite car insurance. We use a panel of insurance companies that can offer a range of cover and premiums. Our panel took his application through underwriting but – as is often the case with young drivers – this was declined."
But the firm was happy to take Mike's cash in the first place while knowing that, if he was a good enough driver, he would pass his test. It is this apparent shabbiness and lack of customer care that really annoys Mr Ford, especially when his son chose to go with M&S because he thought it was a name he could trust.
"If an insurer is prepared to offer a policy to a provisional driver, at extortionate cost, they should be prepared to maintain the policy for its full term and disclose, if necessary, the fact that there may be additional premiums to be paid if the insured passes the driving test during its duration," said Mr Ford.
Other insurers claimed they would not leave customers in the lurch as M&S did. Graham Johnston, a motor strategy underwriting manager at Direct Line, said: "We determine the price of a car insurance policy on the information given by the customer at the time of the initial quote. If a Direct Line customer has a provisional licence and subsequently passes their driving test, we would not cancel their policy or increase their premium when they notified us."
M&S's decision forced Mike to shop around all over again for new cover. He eventually got a deal with Endlseigh, which specialises in covering students and young people, but the cost of cover soared, rising from the £2,750 charged by M&S for annual cover forMike's Fiat Punto to £3,500.
There are sensible explanations to explain why insurers charge young drivers more once they pass their tests. For a start, provisional drivers must have an experienced driver in the car with them, which presumably helps to reduce the chances of an accident. And then insurers have years of experience of claims, which teaches them that newly qualified drivers are more likely than most to have an accident.
"Insurers rate on a variety of factors, and unfortunately 17-year-olds have no proven experience outside lessons and supervised driving," explains Will Thomas, the head of motor insurance at Confused.com. "Driving on a provisional licence is considerably less risky with an instructor guaranteed to be in the car at all times, but as soon as young drivers get on the road alone, the risk of an accident increases massively."
As our table shows, the average cost of cover for a 17-year-old boy like Mike jumps by about £2,000 as soon as he is fully licensed, climbing from about £3,500 to £5,500. Charges like this encourage many parents to "front" policies in an effort to reduce costs. If a parent is listed as the main driver, with the child as a named driver, the policy is likely to cost hundreds of pounds rather than thousands.
But fronting is illegal and it is one of the reasons why insurance premiums are rising so quickly, according to the industry. Faced with having to fork out thousands of pounds, it is clear why so many young drivers and their parents break the law, but there are other things you can do to help cut insurance costs, says Mr Thomas.
"To get cheaper premiums a young driver needs to build up experience and a no-claims bonus," he advises. "It will be expensive at first, but unfortunately this is a necessary evil. After the initial outlay, though, a young driver will see their premiums dramatically reduce year on year. The quicker a driver can get this experience, the less they will pay in the long run.
"It is important that drivers ensure they are getting the benefit of claims-free driving by having a car insurance policy in their own name, or that the policy they are on allows them to earn no-claims bonus as a named driver."
Another option is to continue learning and take Pass Plus, the new driving examination course introduced by the Government to give additional driving experience to qualified learners. Confused says 6 per cent of 17- to 25-year-old men do and save more than £1,000 before they reach 25.
The Sistine Chapel is set to be illuminated with thousands of LEDs
Gillian Anderson lays into gender disparity in Hollywood
- 1 Snoop Dogg and Jared Leto buy a stake in Reddit as A-list invests $50m
- 2 Prince held a Facebook Q&A and this is the only question he answered...
- 3 'F*ck it, I quit': KTVA reporter Charlo Greene quits live on air in spectacular fashion
- 4 35,000 walrus gather ashore on north-west Alaska beach 'for a rest'
- 5 A teacher speaks out: 'I'm effectively being forced out of a career that I wanted to love'
Exclusive: 'Putin's Russia has been my biggest regret,' says Nato's outgoing Secretary General
The Osborne Ultimatum: Chancellor’s benefits freeze bombshell will affect ten million households
There’s no excuse for Dave Lee Travis’s behaviour, but we need to keep a sense of proportion
Mark Reckless becomes second Tory MP to defect to Ukip in a month
Should gay sex be illegal? 16% of Britons think so
Former Tory donor Arron Banks ups his Ukip donation to £1million following William Hague 'nobody' comment
- < Previous
- Next >
iJobs Money & Business
£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...
NEGOTIABLE: Austen Lloyd: TRUST ACCOUNTANT - KENTIf you are a Chartered Accou...
£18000 - £20000 per annum + OTE £30000: SThree: SThree are a global FTSE 250 b...
Highly Competitive Salary: Austen Lloyd: CITY - Law Costs Draftsperson - NICHE...
Day In a Page
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
A three-bedroom, 15th-century cottage with original features in the picturesque village of Sissinghurst
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village
A secluded seven-bedroom detached house with large private garden, £490,000
A three-bedroom cottage overlooking Sarratt village green with open fires and solid oak floors