Most will agree that the Road Traffic (Amendment) Bill, approved by the Northern Ireland Assembly on 12th January, is good news for road safety.
The Bill includes two significant headline changes:
- A new drink drive regime, with graduated penalties reflecting several factors including the amount of alcohol involved, driver age and experience and offence history;
- Introduction of a new graduated driver licensing scheme designed broadly with the aim of ensuring that new drivers undergo a thorough learning regime before they may sit their driving test. It includes also new rules for driving post test.
A more detailed summary of the proposed changes can be found at https://www.doeni.gov.uk/news/new-road-safety-measures-passed-by-assembly.
The changes are clearly aimed at making our roads safer. Experience in other jurisdictions provides reason for optimism.
Graduated driver licensing is a learning regime which has had positive road safety results when introduced in other jurisdictions, including New Zealand, Australia and some states in USA.
In December 2014 the legal alcohol limit in Scotland was reduced from 80mg to 50mg in every 100ml of blood. Police figures for the first nine months of 2015 demonstrated that offending in Scotland had reduced by 12.5% year on year. It is claimed by the authorities that there has been a general change in attitude and that many more drivers now believe that it is not safe to drive after consuming any alcohol.
So what attitude will motor insurers take to the changes?
The new limits effectively introduce zero tolerance on drink driving for young and inexperienced drivers and those who drive professionally. They also introduce low level penalties at the lower blood alcohol levels. I wonder if insurers, when faced with a young driver who has obtained 3 penalty points and a nominal fine for a drink driving offence, will treat that in the same way as a speeding offence. Few insurers are prepared to underwrite young driver business and those who do tend to be conservative in their risk acceptance and risk management. I fear that a zero tolerance on drink driving is likely to be just that when it comes to young drivers seeking motor insurance.
Graduated driver licensing will be viewed positively by the motor insurance industry. The Association of British Insurers have been publicly supportive of the changes. It is unlikely however that introduction of the scheme will result in any reductions in young driver premiums or increase in supply of insurance products in the short term. Insurers will want to see that the theoretical benefits of keeping young drivers safer through the learning regime and sending them out the other end as competent drivers actually result in reductions in road incidents and insurance claim cost.
That said, the nature of the proposed changes should result in the market offering affordable premiums to young drivers in certain circumstances.
At present it can be cheaper for a young person to insure a car as a provisional licence holder than as the holder of a full licence. As the provisional licence holder is permitted to drive only when accompanied by a suitably experienced driver, they generally represent a better risk than the young person who has just passed their test and has been let loose on their own for the first time. Under the proposed changes the young person who obtains their licence at the earliest opportunity will not be able to sit their test for a full year. A young person owning a car from the outset should be able to insure it on relatively favourable terms (as at present). Assuming they have incurred no claims they may, by the time they sit their test, have earned one year’s No Claim Discount which will result in a significant premium reduction.
It will take time for the proposed changes to come into force. The BBC report that it could take a further two years. It will also take time for expected road safety benefits to be realised and in all likelihood for insurers to react with more favourable premiums.
First published on LinkedIn 3rd February 2016