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Women versus Men - Is Gender a Factor?

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It’s not been a great few months for motorists. Soaring petrol prices and rising insurance premiums have made driving a very costly activity, making it almost unaffordable for many.

There is more bad news unfortunately, for women especially. The European Court of Justice has recently ruled that from December 2012, insurers will no longer be able to use gender as a risk factor in determining insurance premiums.

So what does this mean for motorists?

Women typically pay lower premiums as they are statistically less likely to have an accident than men. The current saving on insurance for a woman aged 29 is on average £130 per year.

BIBA (British Insurance Brokers Association) estimates that male drivers under 21 are twice as likely to have an accident than women under 21 and that the average 18-year-old man's claim is for £4,400 compared to £2,700 for the average woman aged 18 .

Despite statistics like this, the European Court of Justice defended its decision as it looks to “eliminate inequalities and promote equality between men and women .”

As insurers look to equalise the rates, those hardest hit by the new ‘unisex’ car insurance policies, will be women aged 25 or under, and they could face premium hikes of up 60%, according to the ABI (Association of British Insurers), that could add an extra £600 a year on their car insurance .

This controversial ruling will have a profound effect on specialist female driver insurers who provide discounted rates for women, as rates begin to balance and equalise leading to them providing higher insurance premiums.

Will male motorists be saving?

The Association of British Insurers predicts that with the rise in women’s insurance premiums there will be a fall in male rates of about 10%.

However, many are also suggesting that the ruling will not reduce premiums for men at all as they are still risky motorists to insure. In fact, if you consider that car insurance providers have operated at a loss for many years, culminating in a record loss of £1.5 billion in 2009 , it seems highly likely that insurers will use this ruling as a way to increase revenue.

Glynn Keeling Managing Director of Autonet Insurance commented: “This gender ban is another blow to motoring confidence. The new ruling ignores the gender factor which helps get a more accurate price for their insurance and this ruling is something the UK insurance industry has been fighting against for the last 10 years. We recommend that all motorists, especially women drivers put a huge effort into shopping around to get the best possible price for their insurance.”

  By Daniel Picking and Ben Malkin
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