What the New EU Insurance Gender Directive means for you
Back in 2011, the Treasury announced that insurers would no longer be able to provide special rates on insurance based on gender. This new legislation came into force on December 21st 2012 and could have a significant impact on how Britons arrange insurance cover.
Here's a quick guide on the new rules...
What it will mean
Historically, young women paid cheaper car insurance premiums than their male counterparts, as they were deemed to be at lower risk of having an accident. Women also received lower annuity payments to reflect this longer life expectancy.
This is now no longer the case. Even if a woman is statistically a much safer driver, she will still not pay any less for her insurance cover than a male of the same age and experience. This could see some women paying up to an extra £300, according to comparison website Gocompare.com. Rates could be even higher for women who have just passed their driving test.
So, will it affect women the most?
It could do, in theory; however younger drivers will also feel the wrath of the changes - something which a study by the Association of British Insurers (ABI) re-enforced, by revealing that the gender ruling will mostly affect drivers in the 17 - 25 age bracket.
When it comes to women, over ten per cent have claimed the new legislation will force them off the road. After surveying 1,219 ladies, uSwitch.com revealed this figure; which has been attributed to the fact that some females will simply not be able to afford the increased payments.
What can be done to reduce costs?
Some insurers are doing all they can do to help female drivers. This includes The Co-operative, which last week said it would offer a 10 - 20 per cent discount to safe drivers who take out or renew a Young Driver policy after December 21st, which would help cancel out any of the rises.
Policies will still offer discounts for things such as lower-risk occupations too, however again no gender allowances will factor into the policy decision or price valuation. It is also essential to shop around for the best deal, taking into account the 120 or so different car insurance providers operating in the market. Plus, it's important to remember that often, renewal quotes won't offer the best price.
Any changes should not affect existing insurance policies and price adjustments should only become apparent when the policy is renewed or the driver takes out a new policy.
Are there any other options?
Young drivers may also want to try a black box policy, which will calculate the premiums you pay by monitoring your driving. This may be an option if you can't find a competitive car insurance deal that you can afford.
If you have any more queries about taking out a new policy, you should consult an independent financial adviser, who will be able to give you more information and guidance regarding the different options you're able to take.