One of the key factors in the calculation of car insurance premiums – gender – is soon to be removed from the equation. On Friday 21st December 2012 the European court ruling will come into effect, meaning that insurers will no longer be able to charge women less for their car insurance. British women were previously afforded this benefit on the basis that statistics prove that males, in particular the under 30s, have more car accidents and the claims they are involved in are generally more costly. As a group to classify risk, men are overall a higher risk for the companies to insure than women.
What is considered to be fair and what constitutes true equality are some of the issues raised by the EU ruling. It is the impact of this, however, that many people are unaware of. Little reason to celebrate; men’s insurance will not be reduced in line with that of women– its women’s premiums that will be increasing. The Association of British Insurers (ABI) estimates that the rise to the cost of insurance for young women will be around 25% due to these changes – this would be a few hundred pounds to the average policy. The backlash to the ruling is strong with many women feeling that their sex should be used to reflect on the statistical risk though those in favour of the ruling state the previous rules for insurance were discriminatory to men.
The picture is bleak for the youngest of female drivers, a group which may overall show a drop in the numbers who will be able to pay for car insurance. Research by the price comparison website uswitch.com indicates possibly one in ten women may now be unable to keep their car, and over a third will have to squeeze their living costs considerably to be able to pay their new higher car insurance costs.