Young drivers benefited the most from the recent drops in insurance premiums, especially those that signed up to fit a ‘black box’ recorder in their cards.

The average premium for drivers under 23 fell an incredible 21%, but the numbers are still sobering. The policy for an under 23-year-old now averages £1,983, according to, which surveyed average premiums with the help of Towers Watson. This amount is often greater than the price of their car.

Young drivers who got the biggest reduction often did so by signing up to have a black box fitted to their car, which monitors the time of day they make journeys, as well as analysing their speed and braking. Not only do the boxes provide invaluable information in the event of an accident, they also report erratic or high-risk driving behaviour to the insurer, which could then raise the premium.

Overall premiums were £51 cheaper last year, with the average motorist paying £594 for their annual premium, a 7.9% improvement on 2013. However policies have started to climb in price again in recent times. In the last three months of 2014, premiums raised by 2%, or £12 a year, which represented the second consecutive quarter of rises.

Insurers cut costs across the board after the government announced a raft of measures to prevent whiplash claims in 2014. This included strict medical assessments for claimants and regulation preventing lawyers encouraging accident victims to make claims.

AA Insurance director Simon Douglas said: “Legal reforms introduced by the Justice Ministry to curb organised attempts at whiplash injury fraud coupled with better fraud detection by insurers have also certainly helped put downward pressure on premiums.”

The insurance industry, though, says that claims are not reducing to the extent it predicted and even countered that a drop in fuel prices has led to people driving more and, therefore, getting into more accidents on the road.

The general feeling is that premiums will continue to rise and we have passed the bottom of the inverted bell curve. Overall premiums have risen 18% in the past five years, even with the recent reductions, and they are beginning to climb again.

Young drivers inevitably have more accidents thanks to a lack of experience. It’s a simple fact of life and insurers have to base premiums on the basic demographics. More advanced black boxes, though, could help reward cautious and safe young drivers with reduced premiums, while erratic drivers pay the price for their indiscretions. A higher degree of personalisation, then, could well be the future of car insurance, so safe young drivers don’t have to pay for their peers.