AA Insurance has found that some 26% of British motorists still don’t know that the European Union’s gender ruling will affect their car insurance premiums next month. The EU Gender Directive will ban insurers from basing car cover costs on gender. An AA/Populus survey of more than 22,500 AA members showed that 29% of women aren’t aware of the change. This makes them the least aware of the change, but they are the most likely to see their rates rise by 25% or more under the new law. Currently, their car insurance premiums can be 40% cheaper than those for young men.
The new ruling will be made effective on 21 December, but 40% of motorists say they didn’t know before the survey when the new law would come into effect, while 23% said they thought it wouldn’t happen until next year. The most aware motorists are between the ages of 18 and 24 – with 78% clued in. The survey also found that 49% of drivers think their premiums will rise, while 38% believe they won’t change. The most concerned about the change are women, with 66% admitting it, compared to just 40% of men worried about a rise in premiums.
With young motorists between the ages of 18 and 25 expected to be most affected, 72% of women think their rates will increase, while 35% of men think theirs will fall. Overall, 30% don’t believe they will see a difference in their premiums following the ruling. Middle-aged people and seniors are the least likely to be affected, along with those using ‘pay-as-you-drive’ or black box insurance policies. Although the initial premium for these policies takes gender into account, more emphasis is put on how the customer drives – whether they are female or male.
AA Insurance director Simon Douglas warns that young men are ten times as likely to be seriously injured or killed in a car crash as motorists aged 35 or older. They are also more than twice as likely as women their age to be involved in a serious collision. Calculating car insurance premiums based on these risks works and is fair. However, the practice has been banned in favour of gender equality.
Douglas went on to explain that insurers have charged young men higher premiums compared to those for women for many years. This has been because they are much more likely to make costly claims on their policy. However, as drivers get older, the difference between women and men in regard to the cost and volume of claims made reduces. From around the age of 40, women and men pay similar premiums.
Alongside AA Insurance, many insurance firms will likely be offering policies that are neutral of gender by the end of the month. Motorists who expect to renew or take out policies over the next couple months are being advised to get a quote as soon as possible to shop around. They should do this before their insurer switches to gender-neutral policies so they can get a gender-neutral quote. Gender-specific quotes should be honoured, and consumers will then be able to choose which policy suits them best. However, insurers could honour a gender-specific quote post 21 December.