Car insurance for women set to soar

Gender risk assessment could be banned as European judges condemn setting premiums for car insurance based on the differences between men and women

Young women may face a 25% increase in the cost of car insurance if the European Court of justice decide that quoting different prices based on gender is a form of sex discrimination.

The verdict will force changes in the current standard practice across Europe where insurance rates are based on statistics such as differing life expectancies or probability of road accidents.

‘The facts show that young, male drivers are most at risk of accidents on the road, so young women currently pay a lower premium for their insurance,’ says Nick Starling, from the Association of British Insurers.

Until now, insurance based on discrimination has been tolerated under the equal treatment policy, which says sex is a determining risk factor based on statistical data. But, the European Court of Justice has declared the current rules breach EU guidelineson equality.

TheABIestimates that the call for change will mean women drivers under the age of 26 will incur a 25% rise in car insurance in the UK, while men will experience a 10% decrease in costs.

‘It’s entirely certain that women’s premiums will go up,’ says leading insurance broker, Mike Williams. ‘I don’t think there is any chance whatsoever that men’s premiums will come down and the reason for this is that men have more accidents and when they have accidents they’re more expensive.’

Julie Owens, of moneysupermarket.com argues: ‘With record price increases to car insurance premiums, the ruling means it is likely many more motorists will be forced off the road, or even worse, be more tempted to drive without any cover at all.’

Do you agree that car insurance should incorporate gender equality? Are you likely to be affected by the European court’s decision? Let us know your thoughts below.

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