Older people could end up facing higher insurance premiums on a range of products if the European Union takes steps to put an end to age discrimination.
Experts believe that since the recent ruling from the European Court to outlaw sex discrimination in insurance, it will only be a matter of time before using age as a risk factor is banned.
This means that there are potentially disastrous consequences for the over-50s who on average pay less for their car insurance and home insurance, as statistically they are less likely to make a claim.
A spokesman for the British Insurance Brokers Association (BIBA), said: “In our opinion, Europe will pick up the ruling on age in the same way as gender at some stage and I think that there is some support within government to ban age as a fundamental rating factor.”
In March, the insurance industry was surprised by the European Court when they decided to ban pricing based on gender. This was despite figures that proved that men and women present different insurance risks, European judges ruled that it was discriminatory, and outlawed it. Difference in opinions
Much like the gender row, the opinion on ageism in insurance is split.
Last year the Equality Act began to tackle the issue when it was introduced into British law to simplify and strengthen equality legislation to end any form of discrimination. It covers areas like race, religion, sexuality and age.
But insurance was listed as an exception to the Act, meaning the industry can still rate against age.
A spokesman for Age UK vehemently support any plans to ban age discrimination, saying, “Age discrimination can work against older people as well as in their favour. Many insurers operate upper age limits and either reject older people out of hand, or offer unreasonable and disproportionate hikes in premiums that appear to be unrelated to any increase in underlying risk.”
Statistics have shown that drivers over 80 are two and a half times as likely to be killed in a collision as drivers in their 40s.
As it stands there is no legislation that requires insurers to not use age as a risk factor, and so insurers will continue to price on age unless the EU take steps to prevent this.
By Ben Malkin
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