New regulations have come into effect today, raising car insurance premiums for millions of female drivers. The European Court of Justice set the new Gender Directive in place last year, banning car insurers from taking the gender of a motorist into consideration when determining how much they will pay for their car insurance policy. This ruling also bans them from basing life insurance premiums and what a person’s retirement income should be on gender.
Female drivers have long benefited from lower car insurance costs because they have lower accident rates. Because of this, many in the industry have tried to judge just how much women will be affected by the changes. Some analysts have predicted huge increases in premiums on both sides, nearly doubling in some cases. However, there have been a few to believe that there will be smaller increases. Despite this, everyone in the industry has expected female motorists to be affected the most.
To bring insurance premiums in line for both male and female drivers, insurance companies are more likely to increase prices for women more than they will decrease prices for men. Policy costs are set to do this, because men are statistically more likely to be involved in serious or fatal accidents. For example, female motorists between the ages of 17 and 25 pay an average £1,247, while males in the same age group pay an average £2,004. Confused.com, an insurance comparison website, is expecting prices for young women to increase 24%, which is about £300. It’s also expected that women between the ages of 31 and 35 will be hit with increases of about 10%, or £53 per year.
MoneySupermarket.com, another comparison website, says that the change in car insurance premiums could happen fast. Insurance expert Kevin Pratt says it may only take a few days or weeks for the market to adjust. More than 100 companies will be vying for business, and it’s inevitable that they will watch what the other is doing. He hopes insurance firms will put more of an emphasis on other factors – like car types, driving records, security measures and jobs – to ensure drivers get a reasonable premium. There’s no reason people can’t continue to deserve the premium they are currently being charged, as long as the insurer can get sufficient information about them.
AA Insurance spokesman Ian Crowder says the youngest motorists will be affected the most. This is because young males are twice as likely to be seriously injured or killed in a car accident than young females. Young women between the ages of 17 and 22, he explained, usually pay as much as 40% less than young men in the same age group…until now. He says premiums are jumping as much as 30% for young women and dropping as much as 10% for young men. Middle aged women and men don’t have as large of a gap, he noted.
The Association of British Insurers (ABI) has posted guidance about the Gender Directive on its website, urging consumers not to focus on prices alone. It’s advising motorists to shop around for deals that suit them the best, while there are ways to get premiums dropped. The association suggests drivers get telematics insurance cover and a black box installed in their vehicle to get rewarded with lower premiums for how safe they drive. It also advises motorists to have extra security measures equipped in their vehicles and to pay for their insurance in single sums instead of instalments.