EU Gender Directive triggers upheaval in Car Insurance CostsTweet
Today is ‘G-Day’ for car insurers – the day the European Union gender directive takes affect that means insurance companies must offer the same premiums to men and women for the same cover.
The trouble is with equality laws that one side is generally more equal than the other and tends to lose out when factors are balanced out.
In this case, women are likely to be the biggest losers as UK car insurance premiums are cheaper for women than men.
Insurance companies employ actuaries – the geekiest of mathematicians to calculate premiums based on risk assessed by poring over statistics that prove a 19 year old lad living in one town is more likely to have a crash that a granny living in a more sedate town.
Now, all those years of statistics go out the window and insurers must price their products without discrimination between gender.
So what does that mean for drivers?
Well, a 20 year old man living in the same post code area as a 20 year old woman should both pay the same premium for driving the same car – providing the have the same driving history.
In monetary terms, our 20 year old woman driver is likely to see up to a 50% increase in the cost of her car insurance from today (21.12.12)
According to some insurers, the directive has already made the average car insurance cost for women drivers has soared from £748 to £862, while the number of insurers offering quotes just for young women drivers has dropped.
Around 50% of insurers have started to offer ‘equalised’ premiums, but most are for older drivers.
Insurers love gender based cover because they can segment the market and offer lower prices for drivers who present least risk of a claim, while ramping up costs for those they see as high risks.
The upheaval in pricing car insurance is expected to drive more motorists towards black-box technology in their cars that prices cover by rating personal driving performance.This entry was posted in Uncategorized. Bookmark the permalink.
Category: Auto Insurance