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17 April 2024

Young drivers hit in the pocket by insurance

By Aimee Greaves


Car insurance companies are making it increasingly difficult for people under 25 to get covered on the UAE’s roads in a bid to reduce the accident rate of young drivers.

Firms are refusing to provide insurance, or will only give it at a higher premium, because figures show more drivers aged between 18 and 25 die than any other group.

The Roads and Transport Authority (RTA) recently revealed 37 per cent of all deaths on roads were caused by drivers aged between 18 and 27 and someone loses their life in a crash every 28 hours. This alarming death toll, according to insurance companies, is the reason behind refusing business to some young people.

Babu Philips, Marketing Manager for Al Fujairah Insurance, said: “Some youngsters are bad drivers and the huge accident rate among them proves this, which is why we make it hard for people under 25 to get insurance. However, once they are above 25 they are treated as seasoned drivers and are given a competitive rate.

“If someone has had a licence for less than two years, they are more likely to have an accident, but if you have had one for 15 years you understand how to drive because it’s all about practise.”

This theory is backed by more horrific statistics. In 1999, 1,452 people died on Dubai’s roads, a figure that more than doubled in 2004 when 3,000 died. And in October last year, more than 256 people died, the majority of whom were male drivers under the age of 25.

Some motorists told Business 24|7 that although these figures made sombre reading they were not a good enough reason to turn experienced young drivers away.

As a result of the insurance companies’ cautious methods, some under 25s are resorting to having their cars insured in their parents’ names, while others are paying what they see as “over the odds” to get covered.

Car lover Mike O’Hara, 22, shells out Dh9,200 a year for insurance on his Infinity FX35, which equates to seven per cent of the car’s value, rather than the four per cent people above 25 pay.

“I should have paid 11 per cent but because I got a letter from my last insurance company saying I hadn’t had any claims, they cut it down to seven per cent,” he said.

Julien Audrerie, Head of Operations and Regional Marketing Manager for Axa, said they insure young drivers, but there were stipulations. “Drivers need to have a minimum of two years’ driving experience worldwide and one year in the UAE. If they have that we will consider them,” he said.

But he added there was still no guarantee. “If you only have two years’ experience, are 22 and buy a Ferrari we will not give you insurance,” he said. “There is a correlation between having an accident and your experience. Young people have bad accidents, so insurers don’t want to take them on because they are a risk.”

Audrerie also revealed Axa offers the same rate – 4.5 per cent – to young and mature drivers alike, as long as they can prove they have not made a claim in the past.

But this is not always the case. When we called Al Fujairah for a quote, posing as a 23-year-old British female, we were turned away, despite other people in the same age bracket being accepted without a no-claims letter.

From the evidence given by insurance firms there does not seem to be any rules across the board governing young drivers, and often it is pot luck whether someone will be able to get insurance.

Mike O’Hara will always have to pay up to twice as much as someone five or 10 years older than him. But he says the car is worth it.

“Age should not be a factor”

Sanjit Bardhan bought a second-hand Jeep Wrangler a year ago and after looking into the cost of insurance, decided to put the car in his father’s name, thus saving him Dh2,500.

The 24-year-old paid Dh6,500 for 12 months, which is five per cent of the value – much less than he was quoted for the car to be in his own name.

“Once I bought the car I didn’t want any hassle so I got insurance from the garage where I bought the car,” he said.

Sanjit has had a driving licence since 2001 and thinks his experience and reaction times should count more than his age.

“I don’t think 25 is any benchmark for getting car insurance. It doesn’t mean you’re a better driver. I’ve had a licence for six years and there are records to show how long you have had a car, which should count for more than your age” he said.

“People under 25 are more agile, so I think there should be a law which says if you have had a licence for five years, it makes more sense for that to be the benchmark.”

The regional sales manager, who grew up in Dubai, admits to having one serious crash when he was 19 in which he wrote a car off after hitting a central road barrier, but he has learned from that mistake and believes experience is more important than one blip on the radar. “Age should not be a factor, it should be your record, so your premium should be higher if you are older and had more crashes than if you are younger and had no crashes,” Sanjit added.