A major car insurer has introduced a new policy targeted at younger drivers offering flexible cover depending on their personal circumstances.
LV= has launched Flow, a ‘fuss free’ monthly car insurance subscription that gives drivers flexible cover with tailored monthly pricing, based on individual circumstances alongside no administration fees.
To simplify the process, customers have to answer 14 questions and take a photo of their driving licence before joining.
Aimed at the millennial and generation Z age groups, LV= has said customers will be presented with a fixed price for the first month and a guaranteed maximum price for each of the following three months.
Flow is online-only and says it offers no long-term commitment, no instalment charges and the option to change or cancel the policy, with no additional costs.
To further simplify the policy, any existing no claims discount a customer holds plays no part in the amount they pay – the premium is based exclusively on a customer’s claims history and their specific circumstances.
The standard Flow policy includes comprehensive, uninsured driver and misfuelling cover.
However, customers will have to pay £2 extra a month for guaranteed use of a hire car if their car is being repaired, has been stolen or written off.
Usually, a courtesy car would be arranged by the insurer only if you have this in the terms of your policy.
If you don’t have this in the policy wording, you would have to inform your insurer about the change of vehicle being used.
What information do policyholders have to give?
The main way Flow is looking to simplify the process is by ensuring potential policyholders only have to answer 14 questions thus saving time.
Those looking to sign up must provide their car registration, driving licence details and their personal details.
Other details needed include how many claims or accidents they have had in the last five years, how long they have had their car and the estimated annual mileage.
Consumers are also given the option of adding additional drivers or cars to their policy.
Heather Smith, managing director of LV= GI Direct, said: ‘The way people buy products and services online has changed enormously, and it’s important that the process of taking out car insurance evolves in the same way.
‘Flow gives drivers a simplified insurance experience, with a quick journey, competitive pricing and the flexibility to change their policy as and when they want to, at a click of a button.
‘There’s no admin fees, no instalment charges and you don’t need an existing no claims discount to get the best price.
‘Whatever drivers want to do – change the mileage, change the driver or even change the car – Flow means it can be done quickly and easily.’
Monthly car insurance subscription is the first product that will sit under the Flow brand, with additional products on the horizon.
How can young people save money on motoring
Young people are charged notoriously high fees for their car insurance as they are deemed to be a higher risk on the roads.
However, under 25s don’t have to put up with pricey fares and can take a number of steps to ensure they are not paying over the odds.
This is Money, with the help of Marmalade, a car insurer for your drivers, reveal how you can keep costs down.
1) Add drivers to your policy: While this might sound counter intuitive, for a young driver, you could knock some money off your premiums by adding another more experienced driver to your policy.
Usually, this will be your parents and suggests to insurers that you won’t be the only person driving the car, therefore the assumed risk won’t always be quite so high.
2) Telematics: Young drivers especially can save money on their policy by having telematics cover as it will accurately clock how many miles you are driving, how fast you are driving and your total mileage.
The safer you drive, the more money you will save on your insurance.
3) Pay annually: Insurers generally charge more for those who spread the cost of cover over 12 months. If you are able to pay for a year in one go, then you are likely to be trim the bill.
4) Keep your car safe: Ensure that you keep your vehicle as safe as you can. If you can avoid leaving it parked on the road, then do that.
Keeping it in a locked garage is your best bet if you want to prove you are reducing the chances of needing to make a claim.
5) Lower insurance group: Picking a car in a lower car insurance group can help you save money as they’re safer on the road and cheaper to cover.
6) Avoid car modifications: New wheels, a huge subwoofer or bodykit may be tempting, but it’s likely to drive up the cost of cover. This is because modifications can change the way a car handles, or make the car more appealing to thieves.
7) Third party cover could cost you more: It’s a common misconception that third party is always cheaper, but this is often untrue, plus you would need to consider that repairs to, or replacement of your car wouldn’t be covered with a third party only car insurance policy.
If access to a car is essential for you and you don’t have enough stashed away in your bank account to cover major repairs or replacement of your car, you are likely to be much better off with comprehensive cover.
Video: DWP explains when you’re eligible to receive State Pension (This Is Money)