Young women's car insurance 'will rise' by 300 today – but men could see a 180 drop as EU gender ruling hits
Young female drivers will see premiums increase by roughly 24%But young male drivers will see them decrease by 9%Pricing from individual insurers will become clearer in the coming months
16:35 GMT, 21 December 2012
Young female drivers will bear the brunt of new European rules which come into force today and could deliver a 300 increase to their average cost of car insurance.
A change to the rules means it is now illegal for insurers to set prices according to gender – and young women are set to be hit hardest.
This is despite the fact that young females are statistically safe drivers – young men are twice as likely to suffer a serious collision, according to the AA.
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Fast lane: Insurance for young female drivers could be up by as much as 40% from today
The motoring organisation also says
that young men are 10 times more likely to be killed or seriously
injured in a car crash than those aged 35 or over. Historically, this
has meant cheaper premiums for women and those with plenty of driving
But despite the shocking statistics, men aged between 17 and 25 will be the biggest winners from the changes.
comparison website confused.com says that on average, they are charged
2,004 for cover. But this will slip to 1,824 from today, a nine per
cent – or 180 – drop.
Female drivers between 17 and 25 pay an average of 1,247 for cover – but this is will rocket by 24 per cent, to 1,546.
industry experts believe the changes could result in rises of anywhere
between 10 to 40 per cent for young female motorists.
Women aged between 31 and 35 are also likely to be hit, with a rise of around 10 per cent – 53 – a year.
Despite the ruling only coming into effect from today, car insurance quotes for women were up 15 per cent – or 114 – on average last week compared to six weeks' previous.
Price comparison website Gocompare.com said car insurance for women was now 862 on average – up from 748, as the industry re-priced according to the directive.
Experts say that at present, it is impossible to tell how individual insurers will factor in the changes – but the picture will become clearer in the coming months as the data on how they have hiked prices emerges.
PREDICTED CAR INSURANCE PRICES FOR MEN
Average car insurance premium
Forecasted % change
New average car insurance cost
'Insurers are stepping into the unknown'
Simon Douglas, director of AA Insurance, believes the changes are not all bad. He said: ‘Not everyone will see such big changes. In many respects, insurers are stepping into the unknown.
‘While the gender directive is patently unfair, given the widely different claims patterns between young men and young women, it has led insurers to reassess how they take other aspects of risk into account – such as age, occupation and postcode, as well as the model of car driven.
‘Not only is this happening at a time of falling car insurance premiums, which means that the differences will be less pronounced than they might otherwise have been, it also anticipates legal changes, including measures to control whiplash injury claims, that will take place in April which in turn will reduce insurer costs.
‘Insurers are taking these changes into account and reflecting them in their rates.’
Big winners: Young male drivers will see premiums drop from today
In some cases, he says, new gender-neutral premiums are lower than the average quotes before the change while men are also seeing reductions in their premiums thanks to the change.
For example, student nurses – 90 per cent if whom are female – can expect their premiums to remain the same or in some cases fall.
The European Court of Justice’s ruling – which follows a ten-year legal battle against the proposals by insurers – will now put an end to women getting better deals on car insurance.
Vice-President Reding, the EU's Justice Commissioner, said: ‘Gender equality is a fundamental right in the European Union and the Court of Justice made clear that this also applies to insurance pricing.
‘The insurance sector has had over a year to prepare the switch over to unisex pricing and the European Commission has helped the industry to adapt during this period. The Commission will monitor how the industry will implements these new rules in practice.’
The Association of British Insurers said only new insurance policies and renewals will be affected by the rule change.
The rise of blackbox telematics insurance that could cut costs
Telematics insurance – otherwise known as blackbox policies – uses data on speed, acceleration and cornering forces to create a driving profile that can then reward careful drivers.
This type of insurance is targeted at younger drivers. It allows them to pay lower premiums by proving they do not fit the stereotype of boy racers.
In recent times, insurance giants including the Co-op, Direct Line and the AA have launched these products as inexperienced drivers look for ways to prove they are a safe driver and bring down their premiums quicker.
VIDEO The Association of British Insurers comment on the changes…
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'I SAVED 44% ON MY CAR INSURANCE IN JUST A YEAR'
Nursery nurse Laura Keely is convinced she is a safe and responsible driver.
The 21-year old from Birmingham opted to have a blackbox
put in under the dashboard of her Vauxhall Corsa by Insurethebox.
At the end of the month, the insurer downloads the data and gives her a score out of 100.
The better she drives, the cheaper her policy will be at the point of renewal.
In 2011, the first year with the new
Insurethebox technology installed, she paid 1,800 for a comprehensive
policy. Twelve months on, her premiums have dropped to just 1,000 — a
44 per cent fall.
Data has indicated that those who
drive with a blackbox are safer on the roads – according to 300million
miles of data from insurethebox, accident rates
are reduced by 35 to 40 per cent. Co-operative Insurance, which
offers telematics, says the scheme has led to a 34 per cent reduction in
the cost of car crashes.