Women's Insurance Advice: New EU Law Explained

Every autumn tens of thousands of parents around the UK send their children off to university with high hopes and great expectations. Some send them off with a little extra cash in their pockets; others provide computers, clothing, and other university essentials; still others provide what is known as student insurance.

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At the end of 2012 a new European Union law came into effect whereby it was stated that women being eligible for cheaper car insurance premiums should be scrapped. Up until this directive came into force women were able to get cheaper car insurance based solely on the basis of gender. This was deemed unfair, hence the law change. The fact that women are involved in fewer road accidents, plus claim on insurance less makes no difference at all. Women will now see their premiums rise by up to £360 per year depending on which company they go for, their age plus what type of cover they want.

The sudden rise in premiums will cause hardship for many women who will find it difficult to find the extra money they will need to pay for their car insurance. Some may even find they will have to sell their car or borrow money to cover costs. This is of course a great shame but equality has been long awaited by men. The feeling is that women have had it good for far too long. Women want equality in all areas so why not when it comes to car insurance?

Most drivers agree on one factor that is, premiums should be based on driving history. This means that careful drivers whatever gender will receive a fair deal. Some of the frequently asked questions regarding this directive are listed below.

How Much Will My Premiums Rise?

Women on average will see their premiums rise by 24%. This judgement will cost consumers around £1 Billion

Who Made This Decision?

The judgement was made by the European Court of Justice. The judgement not only made a case against cheaper car insurance for women but also lowered annuity rates for men. The result is that millions will receive a lower pension when retiring

Who Brought the Case to Court?

A consumer group in Belgium brought this case to the European Court of Justice

Does My Age Affect My Premium?

Younger female drivers will actually be affected more. This is due to the fact that male drivers between the ages of seventeen and twenty two are classed as more likely to be involved in an accident due to their driving speed. Males in this category pay up to £1,500 per year more for their car insurance. This means that women in this age group will be judged the same therefore pay much higher premiums.

Is there any way I can lower my Premium?

One way to reduce your premium would be to lower the grade of your car to a smaller more economical model that is less powerful. Drivers could also try to cut the length of their journeys to save on mileage. Using comparison websites to compare insurance premiums is also a good way to get a cheaper and better deal.

I am over Forty will this Directive affect me?

The good news for the over forties female driver is that this change will have very little effect on their insurance premiums. Drivers of both sexes are deemed to be equal in terms of risk at this age meaning their premiums are virtually the same already.  Women over fifty who pay slightly more for their car insurance will even see a cut in their costs due to the change.

Why Can't Insurers Ignore this Ruling?

The Association of British Insurers went to the European Court to try to gain exemption from the gender rule last March. They were defeated in March 2012 plus were given until December 2012 to bring the ruling into being and get their houses in order.

Are We the only Country Affected?

We are not the only European country affected by this directive. Ireland and Spain were two other countries that provided gender based car insurance so have had to comply also.

What is Telematics?

It is thought that the Telematics system may be used to judge where a car insurance premium should be set. The Telematics device is fitted into your car collecting data on how you are driving, when, what speed you drive, how many times you brake, where you park your car overnight and how many miles you do,  via the computer to build up a history or picture of how you drive.

This system has not caught on so far in the UK but is expected to gain in popularity following this ruling. The telematics system of insuring is expensive at first but as a picture gradually builds of your driving habits the premium will fall if deemed appropriate. Trials are underway and it will be interesting to see what the outcome will be.

Does this Directive Affect Anything Else?

Yes in fact it does. Pricing pensions by using gender is now not allowed. Pricing Life Insurance based on gender is another. Women tend to live longer so will lose out once again when it comes to life insurance, while as far as pension pay outs are concerned women will gain as at the moment they receive lower annuities due to living longer. This now is not accepted, so at least there is one plus.