The Financial Ombudsman Service urges young drivers to make informed decisions with car insurance

We are urging young drivers across the UK to make well-informed decisions when taking out car insurance.

We are a free and independent dispute resolution service and can resolve complaints between insurers and their customers. We work closely with insurance providers to share insights which can help improve their operations. However, with many young people getting behind the wheel for the first time, it’s vital they understand what to look for in a policy and how to avoid common pitfalls.

Last year (1 January to 31 December 2025) there were over 1,200 car insurance complaints from drivers under the age of 25 to us. The top three issues were cancellations of policy, followed by administration or customer service problems and claim related complaints including delays in settling claims.

We have identified issues that can affect car insurance policies and sometimes premiums which newer drivers may not be aware of. These include undeclared car modifications, concerns over telematics devices, and ‘fronting’ – where a more experienced driver, such as a parent, claims to be the main driver of the vehicle that is mainly used by a younger, less experienced driver.

Andy Wright, Ombudsman Director said:

Driving a car for the first time is often seen as an exciting rite of passage, but young drivers can overlook key details when choosing car insurance. 

Failing to declare modifications, 'fronting' policies, or misunderstanding telematics are all common pitfalls we've seen at the Financial Ombudsman Service. This is why we’re urging young drivers to always read the small print and speak directly with their insurer if anything is unclear to avoid costly mistakes.

Our service offers free, fair and final answers to insurance complaints. So, if something has gone wrong and you’re unhappy with how your insurance provider has handled your issue, you can bring a complaint to us and we’ll see if we can help.

There have been complaints to us from drivers who unknowingly invalidated their car insurance due to undeclared car modifications. From body kits and custom paintwork to performance enhancements such as upgraded exhaust systems or engine tuning, it’s important that consumers review their policy documents and speak to their insurer if they are unsure whether something counts as a modification.

As telematics devices become more popular, we have also received complaints related to telematics insurance, with the most common complaint issues being around mis-sale, data collection problems and policies being cancelled. Telematics devices, often referred to as ‘black box’ devices, are fitted to vehicles or operated via a smartphone app and track everything from speed and distance to driving habits, which could help drive down insurance premiums.

Some young drivers have seen their policies cancelled when they have left their cars at home when they go to university due to the lack of data being collected as vehicles were not being driven. There have also been complaints over the quality of data collected by insurers, and unexpected premium increases linked to driving scores.

Key tips for young drivers

1. Understand your policy – make sure you know what is covered (and what is not): Review your insurance policy and contact your insurer to clarify if anything needs to be declared. 
2. Be honest on your application: Always provide accurate information about who will be driving, where the car will be kept, and any driving convictions. Failing to be truthful could mean your policy is invalid and claims may not be paid.
3. If considering a telematics (black box) policy, understand how it works and what data feeds into it: Telematics policies can be good and offer reduced premiums for ‘good’ driving. But if your driving habits do not match the policy requirements, then you might never get these benefits, or worse, your policy may be cancelled. 
4. Check the details on excesses, courtesy car provision, windscreen cover, and what happens if your car is written off: Do not be afraid to ask the insurer to clarify anything you are unsure about.

Useful links

• Read our motor insurance information to find out more about what we do and how to bring a complaint against a financial services firm. 
• For free and impartial guidance (backed by government) on money matters, visit Money Helper.