Women have long been considered safer drivers. The image of the boy racer pulling doughnuts around the car park of your local supermarket by night has some truth in reality – but is it really fair to make the majority of conscientious and law-abiding male drivers pay more for their car insurance quotes because of the stereotype of teenage high jinks?
Last year the European Court of Justice ruled that it was discriminatory for men to pay higher insurance premiums than women. This change is due to come into effect from December 2012. The current average cost of an insurance premium for an 18 year old male is £2,700 more than that paid by his 18 year old female counterpart.
We take a look at few of the arguments for and against this controversial ruling. Do you think that women are now subsidising the mistakes of male drivers? Or is this a long overdue levelling of the difference in cost?
UK insurance companies are said to be dismayed at the ruling and complain that the new law preventing gender-calculated pricing means that they can no longer offer a ‘fair price’ calculated on an individual’s risk factors. Indeed, some insurance dealers in the UK use the gender difference as their unique selling point and are outraged at new illegality of their low-cost insurance products marketed to women.
Criticisms of the ECJ insurance quality ruling:
- The lower rates for women were entirely within the actuarial basis on which insurance is worked out
- 80% of all fatal crashes are apparently caused by men
- The price changes will not affect people in their mid thirties and older
- Some resent the ruling by European Court of Justice
- The change in the law could mean that more men opt for powerful cars as insurance costs fall
The retirement costs for men are also predicted to go up, as they are starting to live longer will receive less, spread out over their increasing retirement period. This is just the tip of the iceberg for new developments in car insurance.
Car insurance premiums are thought to be set to fall because of the reduction in the number of crashes because of ‘black box’ tracking equipment that monitors the speed, mileage, braking speed and turning curve of the car. This new technology, known as ‘telematics’, seems to be turning the 18-25 year old demographic into a more careful group of drivers. Claims for telematics insured drivers have fallen 20% over the last year.
It remains to be seen how the changes to gender-based insurance will affect the young car owner, but it’s likely that the cost discrepancy between men and women will even out so that both genders pay a similar amount to one another.