Hi °C | Lo °C Northern Ireland’s women drivers are among the biggest losers following a new EU gender rule on car insurance that has come into force.
A change to existing rules means that insurers are now banned from setting premium prices according to a person’s gender — which could cost women around £300 more.
Previously a young woman could get a cheaper deal than her male counterpart because she was seen as a lower risk.
A female driver aged between 17 and 25 pays an average of £1,551, according to the AA, compared to an average of £1,977 for a man in the same age group.
But the European Court of Justice’s ruling, which follows a 10-year legal battle against the proposals by insurers, will put an end to women getting better deals on car insurance.
Premiums could go up by 24% for young women — equivalent to around £300 a year — as a result of the rules, according to industry experts.
Women aged between 31 and 35 could face a rise of around 10% — or £53 — a year.
AA Insurance spokesman Ian Crowder said that the average shoparound car insurance premium across the province was £736 a year.
“During the last quarter of 2012 premiums in Northern Ireland fell by 3.1%, which was the second biggest fall in the UK,” he said.
“What this new gender neutral regime means is that insurers will have to start from scratch again; they’re going into the unknown, but they’re doing so at a time when premiums are generally falling again reasonably rapidly, so that gives them scope to not pass on the additional costs.”
Mr Crowder said that women in gender specific occupations, such as midwives or nurses, can expect their premiums to stay the same or even fall.
Similarly, he said that men who are in male gender specific occupations, like HGV drivers or scaffolders, are as likely to see the cost of their policies staying much the same, rather than falling.
He added: “The message in the gender neutral market is that consumers should shop around.”
The new EU directive states that “gender should not be used as a risk factor to create differences in premiums between men and women”.
David McKendry, operations manager at Adelaide Insurance, a local broker, said most policy holders won’t notice much difference.
“There has been an awful lot of hype surrounding the issue but I don’t think people are going to see huge changes in their premiums,” he said.
“Women are going to see increases, but males will not see the same types of decreases because insurance companies may use this as an opportunity to realign their rates.”
The Association of British Insurers said only new insurance policies and renewals will be affected by the rule change.
Background
Historically, young women have paid premiums that could be 40% cheaper than their male counterpart, because young men are 10 times more likely to be killed or seriously injured in a car crash than those aged 35 or over, and more than twice as likely as young women to suffer a serious collision. Drivers using black box policies will be least affected by the gender ruling. Premiums for such policies are based only on the way customers drive.
Simple tips to put brakes on high premiums
There is a massive variation in the cost of car insurance.
The price you pay will depend on age, where you live, your car and whether you’ve made any previous claims. The price will also vary from insurer to insurer and you can save hundreds of pounds if you shop around. Also, insurers like it if you:
- Only put regular drivers on your insurance policy.
- Protect your no claims bonus. A long no claims bonus is the single best way of cutting car insurance costs.
- Increase your voluntary excess. Agreeing to pay more towards the cost of accident repairs will cut premiums.
- Fit an alarm immobiliser: it can mean a 5% discount.
- Reduce your annual mileage. The fewer miles you drive, the greater the saving will be.
