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What is the cheapest (and best) car insurance company for young drivers?

Young drivers pay the highest insurance rates of any demographic in Australia, and the younger you are the more you’ll pay for insurance.

If you want to significantly reduce the amount you pay for insurance, your options are quite limited.

These include:

  • taking only Compulsory Third Party insurance, and gamble that you won’t get involved in a an accident that results in expensive property damage
  • raising your excess to the point where your cover only kicks in for serious damage to your car, and pay out a small fortune if you make a claim against your policy
  • downgrading your car or getting an old or cheap car that attracts low insurance rates
  • spending the next few years of your life as the part time driver of the family car on your parents’ policy, and potentially being bankrupted by a high excess if you cause an accident
  • moving to Queensland, which has the cheapest comprehensive insurance rates for young drivers in the country.

If none of the above appeal to you, then you’re left with one option, which is to shop around for the best car insurance companies for under 25s in your state or territory.

Get fairer car insurance. Based on how you drive

Understanding your options

Before you can decide who is the best car insurance company for young drivers in your state, it’s worth understanding what your insurance options are.

Compulsory Third Party insurance

CTP insurance, known as green slip insurance to New South Welshmen, is a legal requirement in Australia.

This covers expenses arising from physical injuries resulting from any car accident you are involved in.

Most states make it very easy to get CTP insurance, as it is normally covered in your car registration fees.

In Queensland and New South Wales you can shop around for providers.

Third party property insurance

Most drivers want more cover than CTP insurance provides because accidents cause damage to property, which you may have to pay for out of your own pocket if you don’t have insurance cover.

Third party property insurance covers you in the event you damage someone else’s car or property in an accident, and is generally the minimum level of insurance you want to drive around with.

Third party property, theft & fire

Third party property, theft and fire insurance, covers you for third party claims, and provides limited protection for your own car.

Apart from cover for any third party claims, you’ll have cover if your car is stolen or fire damaged.

However, if your car is accident damaged you’re on your own.

Comprehensive insurance

Comprehensive insurance is the best car insurance option for young drivers.

This protects you against third party claims as well as theft and accident damage to your car.

You’ll also get some other useful cover thrown in, like windscreen replacement and hail damage.

Comparing types of young driver car insurance in Australia

Type of insuranceDamage to your carTheft of your car or fire damageDamage to 3rd party property3rd party injury or death
Compulsory Third Party (CTP)XXX
Third party propertyXX
Third party property, fire & theftX
Comprehensive

Which are the best car insurance companies for young drivers?

The biggest challenge facing young drivers is that most insurers do not take into account how well their clients drive when providing them with insurance quotes.

Instead young drivers are hit with high insurance rates by default just because they are members of a demographic that is at higher risk of having an accident.

With this in mind, the best car insurance companies for young drivers are those that treat young drivers as individuals, and take their driving behaviour into account when providing them with insurance quotes.

The only insurers who are currently able to do this are telematics insurance companies.

What is telematics insurance?

Telematics insurance is a form of car insurance that uses telematics technology to build up a very accurate profile of a person’s driving skills.

This form of insurance requires the insured person to have a telematics enabled device with them while they are driving.

This can be a telematics black box unit installed in the car, or a telematics app that transforms a smartphone into a powerful telematics unit.

This unit then tracks critical information while the person is driving, building up a highly accurate picture of their driving skills.

Armed with this, telematics insurers can more accurately gauge how much risk an individual is of having an accident, and reward good drivers with discounted insurance rates.

Introducing UbiCar

Technology allows telematics insurers like UbiCar to offer fairer insurance rates than traditional insurers.

How it works:

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