Towards the end of this year cheaper car insurance premiums for lady drivers, because of their gender, is to cease.
The European Court of Justice (ECJ), in March 2011, decreed that, by the 21 December 2012, insurers could no longer use the fact that the policy holder is male or female as a factor in determining the level of insurance premium as this would be viewed as “indirect sexual discrimination”. This applied to the likes of life cover and car insurance as well as some other forms of insurance.
This ruling was made despite the fact that statistically women will, on average, live longer than men and are less likely to claim on their cheap car insurance policy as they are not as likely to have an accident in the car as a man.
This decision has caused a real headache for insurance companies here in the UK that has the biggest market share in Europe and the third largest in the world.
Although December 2012 is still some months away the Confused.com/Towers Watson Car Insurance Price Index has revealed that some car insurance companies have already increased their premiums for female drivers. For instance, in Sheffield and Leeds women aged 26-30 have seen a 4.3% increase. In Merseyside and Manchester, women between 21 and 25 years of age have seen an increase of 4.7% and lady drivers aged 66 to 70 have seen their premiums rise by 9.7%.
However, in the last twelve months insurance premiums for ladies have reduced by 3% overall.
This index also showed that car insurance premiums have increased by 61% since 2006.
Comprehensive insurance premiums for men have dropped by 1.8% in the twelve months to March 2012 with an average annual premium of £869. The average premium for women drivers is only £751 – that is £118 less than for men.
The index also revealed that a male driver residing in either Merseyside or Manchester aged between 17 to 20 would pay, on average, £5,530 per annum for fully comprehensive car insurance that may be more than the value of some of the vehicles these men are driving.Interestingly, the average largest premium being paid by a female driver between the ages of 17 and 20 residing in Inner London for comprehensive insurance is £3,181 per annum.
Women drivers should prepare themselves for a likely rise in car insurance premiums later this year.
