Insurance premiums could soar for women drivers

| September 9, 2014
Insurance premiums could soar for women drivers

The government has warned that car insurance premiums for female drivers could rise by 拢326 when a European Court of Justice directive comes into force in September 2015.

It has launched a consultation on how the decision to ban gender pricing in insurance contracts will affect the UK.

The ruling will mean that insurance companies will no longer be able to charge women a lower car insurance rate than men.

Women have traditionally received a discount because they are considered to be lower risk drivers but when the directive takes effect they will have to pay more expensive premiums to subsidise their riskier male counterparts.

The decision is expected to have the greatest effect on the price of premiums for women under thirty, who currently pay around 50 per cent less than men of the same age.

The government is concerned that the ruling could have an adverse effect on road safety if a fall in the cost of car insurance premiums for men leads to them purchasing higher-powered cars.

However, women may benefit from the ruling when buying a pensions annuity as they have a longer life expectancy than men and currently receive a smaller annual pension for the same amount of money.

After gender neutral pricing takes effect annual pension payouts for men are expected to fall by 拢68, but could increase by 拢331 for women.

Treasury financial secretary Mark Hoban said: 鈥淲hile nobody should ever be treated unfairly because of their gender, financial services providers should be allowed to make sensible decisions based on sound analysis of risk.鈥

With motoring costs already soaring, the changes are likely to hit women drivers hard.

According to the latest RAC Cost of Motoring Index, the average cost of car insurance increased 14.4 per cent to 拢551 in 2014, compared with the previous year.


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