New Car insurance gender precedent will affect your premiums

Wednesday, 9th March 2011

UK vehicle insurers will no longer be allowed to use gender as a factor when setting car insurance premiums following a new ruling by the European Court of Justice. In theory, it means that a man and a woman whose details are otherwise identical should pay the same premium for their car insurance. Insurerance companies have been given until 21st December 2012 to change their quotes to meet the new guidelines.

Vehicle insurance currently has one of th largest gaps in prices between gender and this is mainly due to statistical evidence that women make less expensive claims than men. It is not the number of claims that each gender makes in total, but women tend to have small accidents with lower claims whislt men tend to be involved in bigger accidents which result in more write-offs.

After the new rule comes into place, men should expect to see their insurance costs reduce, which is especialyl good if your comapny has a lot of male drivers. In reality, we expect to see insurance for women to increase to the same level as currently for men, as the insurance companies will still need to be bringing in enough premiums to pay out all their claims. Also, it is thought that young drivers will be affected the most as their is a large differential between younger and older drivers.

Insurance companies are now investigating new factors to calculate thier insurance premiums that will also give them a market edge over their rivals, such as using occupation as an option. There will also be a knock on effect to life assurance quotes as women tend to live longer than men, so looking to the future men should see their premiums reduce whilst womens life assurance will rise. This is not all good news for men though as pension payments used to be higher for men (as they live shorter lives) so men could see their pension payouts reduced in line with women.

Cost Saving Expert advises all companies who offer company cars with insurance included to keep an eye on the marketplace. Your previous car insurer who you have used for years, may no longer be the cheapest option. Those firms with a large proportion of men, women or young drivers must also budget for large variances in their new premiums.

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