EU rules could cost women drivers

May 15, 2016

insurance, news


There’s a change coming at the end of 2016, and it doesn’t bodes well for women drivers. From December 21st (uncannily coinciding with the supposed Mayan ‘end of the world’ prophecy).

CC 'F0T0Synth' (Flickr)

The European Court of Justice (ECJ) has ruled that gender will no longer be allowed to be considered when car insurance companies work out how much premium people pay.

This has had very mixed reactions, as it represents a big leap for gender equality, but it also means that premiums are likely to increase for women, making people wonder if the ruling is fair.

The current situation

Insurance prices are calculated based on a mix of difference factors, which themselves are based on years’ worth of insurance statistics.

From these stats, insurers have found that female drivers are consistently safer drivers than men. Male drivers often note that “men have less accidents that women, but when we do it, we do it properly”, and there is some truth in this.

Accident levels between men and women are similar in number, but the average cost of a claim for a male driver is higher than his female counterpart. A lady driver might nick the bumper in the car park or scratch the paint when getting out of the car, but a male driver would be more likely to hit an obstacle or write-off his car completely.

What will change

The statistics don’t lie – women are safer drivers, and as a result have been enjoying a discount on their insurance because of it. This makes sense, as insurance prices are based on risk, and if you’re proven to be a lower risk then you should pay less.

This has been common knowledge for a number of years, and a number of female driver-only insurance companies have sprung up to cater for this, and many other insurers offer special rates on women’s car insurance.

However, once the gender ruling kicks in, that data can no longer be used. This will equalise the rates, which will in all likelihood see car insurance for men go down a little, whereas women’s car insurance has nowhere to go but up.

Light at the end of the tunnel

Although it’s something that all insurers have to adhere to, they won’t take this new ruling lying down. In order to keep a more accurate risk profile for their customers, car insurance companies are going to have to look for other ways of assessing drivers.

What you may see in the future is that insurers put far more emphasis on the type of car that you drive, or what occupation you have. From this, we could even see insurance companies rating more favourably for occupations and car models that are predominantly female-centric.

The system will even out eventually, but for the first few months or even years once the ruling takes effect we’re likely to see our car insurance prices see-sawing as insurers try to find the right balance of rating factors.

What do you think about the ruling? Is it about time we had insurance equality, or should women still get favourable rates? Tell me what you think in the comments below.


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  • http://www.facebook.com/grassyllama Margaret Kay

    I’m shocked that insurance companies have been allowed to discriminate based on gender for so long- glad to see that’s coming to an end! As for basing rates on occupation or car model- I think it’s all hogwash! HOGWASH!

  • EthansMoney

    The impact of the EU equality regulation on car insurance will probably, in time, be positive. It will force insurers to find more precise factors on which to determine risk, rather than the fairly blunt tool of gender discrimination.

    I think that the impact on pension annuities is likely to be more problematic. As I understand it, the equality regulations will force insurers to equalise annuity rates (i.e. the amount paid per year) across genders. This means that for a given size of pension pot, women will receive more money (same annual amount multiplied by more years of life expectancy) than men. That strikes me as unfair – any views?