The European Union has stated earlier this year that car insurance for women does fall foul of equality legislation and insurers will be banned from doing it from December 21st 2012.
This news has caused an influx of varying opinions some including anger and outrage at the prospect, mainly from women. A survey showed that 8 out of 10 women say that the new EU Court ruling to pay more car insurance is unfair. 78% were unhappy with the decision, whereas 22% thought the decision was reasonable. 74% of men also believe that this is reasonable as it will mean a reduction in their premiums. Some are arguing that insurance costs should be based on the drivers’ past records, not age or gender, even though statistics show that male drivers - young male drivers in particular - have significantly more road traffic accidents than women.
Men are arguing that the reason women do not have as many accidents as them is because they do not tend to drive as often, with women working shorter hours and going on maternity leave.
Women argue that pension premiums for them are higher because women statistically have a longer life expectancy, whereas men tend to have shorter life expectancy, this means that women have to pay more pension rates based on these statistics so how is it any different to statistics for car insurance? It really is a grey area and the EU have certainly opened a sore wound for some.
Simon Douglas, director of AA Insurance, said: "The use of gender in calculating insurance risk has been a thorn in the EC's side for many years and indeed, the current UK use of gender in this way is illegal. However, my fear is that the European Court of Justice will no longer tolerate such exceptions and the UK and some other EC countries that use gender to calculate risk, will have to toe the European line.”
Women’s insurance rates are likely to increase drastically, an average insurance payout per year is approximately £2,000 for men and £1,620 for women, this is nearly a £400 increase for women.
On the one hand I can see a good and a bad side to both men and women paying the same amount for car insurance. The insurer being risk averse would charge the highest rate for all thus meaning that both genders will have to pay a higher amount regardless of gender or statistics, but an opportunity does present itself; In order for insurance companies to become highly competitive against their competition, they could reduce the payments that car owners pay until a car crash or an accident happens and then the insurance companies can raise the insurance rate – some companies could even charge up to 100% extra on this basis. Not only would this be a much fairer option, but perhaps it would also be a good incentive to make drivers even more careful on the road and reduce traffic accidents, thus reducing the possibility of more traffic accidents on the road.
Just a thought.
What do you think? Comments are welcome.
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