Women To Pay More for Car Insurance

WOMEN TO PAY MORE FOR CAR INSURANCE The European Court of Justice (ECJ) recently ruled that car insurance companies can no longer use gender-based data to determine the premiums their customers pay. "The ruling is effectively a gender tax on women" says Mike Hoban, the marketing director of Confused.com. "It is extremely unfair and illiberal that women will be penalised for the fact they cause less serious accidents and make less expensive claims than their male counterparts." We've taken a look at the facts. GENDER DISCRIMINATION CAR INSURANCE PREMIUMS ON THE UP & UP Currently, the average premium costs £695- almost £200 more than one year ago. Third party, fire & theft insurance rates have on average increased by 56.3%, or £322 in 2010. That's more than twice the increase seen in 2009 when rates rose 21.6%. With an increase of 49%, the price for fully comprehensive insurance in Manchester rose the most over the past 56.3% year. That's 10% above the UK average. The cost of a comprehensive policy rose an average of 38.2% in 201O. 49% 38.2% Yes, men pay more than women... But there's a reason why: 3. 3. Rates are generally lower for women because, according to risk analysis data, they have far fewer collisions, and AVG FULLY COMPREHENSIVE PREMIUM 94 2010 DIFFERENCE IN PRICE (MEN-WOMEN) AVG FULLY COMPREHENSIVE PREMIUM Q4 2010 AGE AGE 17-20 2,976 1,282 1,694 17-20 the average claim costs much less. 21-25 1,412 462 950 21-25 26-30 892 235 657 26-30 31-35 666 154 512 31-35 2X 36-40 563 82 481 36-40 Male drivers under the age of 21 are twice as likely to be in a collision than female drivers 41-45 578 -8 586 41-45 under the age of 21. 46-50 623 -5 628 46-50 51-55 595 58 537 51-55 CURRENTLY THE AVERAGE ANNUAL PREMIUM COSTS 56-60 490 105 385 56-60 18 £4,400 61-65 415 101 314 61-65 362 18 £2,700 71+ 397 35 71+ What exactly is changing & how will it affect women drivers? WHAT IS CHANGING? WHEN IS IT HAPPENING? The European Court of Justice has made the decision to ban gender pricing on all insurance- related products - including car insurance. Despite the 21 DECEΜBER 2012 fact women are safer drivers than men, this will no longer be factored into the risk analysis used by insurers. DOES THIS MEAN WHO IS IT THAT RATES FOR AFFECTING? MEN WILL BE CHEAPER? As you can see in the chart above, as age increases the difference between male and "It's unlikely that premiums male drivers will reduce female premiums gets smaller. This means that it will be young female drivers who will much as their risk is still considerable." Steve Foulsham, BIBA technical services manager. suffer the most from the policy change. It also means that women under the age of 25 could see their car insurance rise 25 percent, according to the Association of British Insurers (ABI). HOW MOTORISTS ARE RESPONDING Some parents are fronting insurance policies and adding their children as secondary drivers in order to save money, even though FRONTING the child is the one who drives the vehicle the 46-50 most. But insurance providers have caught up with the trends and are now raising rates for older insurers who are looking to year old male and female policy holders who added plus ones witnessed price increases of 65.6% and 60.3% add someone other than their spouse as a plus one onto their policy. respectively from one year ago. £2 FRAUD BILLION The high levels of insurance fraud add £44 annually to every household's insurance cost, as providers seek to recoup the lost money. The cost of fraudulent insurance claims, according to the National Fraud Authority. £30 NO INSURANCE MILLION Rough amount providers add annually to every policy due to the high level of claims that involve uninsured drivers. £1 Driving with no insurance at all is most prevalent in young drivers. In the last five years, when compared with those over 60, drivers under 26 are ELEVEN times more likely to be convicted for driving with no insurance. Uninsured drivers make up one in 20 cars that drive on Britain's roads. THOUSAND Maximum fine for driving with no insurance. SOURCES: http://www.confused.com/ecj-ruling | British Insurance Brokers' Association (BIBA) | http://www.guardian.co.uk/money/2010/jan/28/car-insurance-costs-rise | http://www.bbc.co.uk/news/business-12606610 Confused.com 0000