New EU insurance law could force one in four women off the road
New uSwitch research has found that one in four women (24%) could be priced off the roads when the new European gender ruling comes into force on 21 December 2012.
The ruling, which will prevent insurers from discriminating on the basis of gender when setting premiums, could leave 13% of women unable to afford car insurance and a further one in ten (11%) forced to sell their cars.
With premiums for female drivers widely expected to rise by up to 25%, over a third (35%) of women say they will have to cut living costs and a further 5% would be forced to borrow money to meet the higher premiums.
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New ruling ‘long overdue’
Despite the hardship facing female drivers, two thirds (66%) of men believe the new ruling is about time. A fifth (18%) argue that they have been treated unfairly paying the lion’s share of premiums, while just under half (45%) believe they have been unfairly discriminated against.
Just 18% of women think that the new ruling is acceptable, and one in four (25%) are concerned that they will end up footing the bill for riskier drivers.
When it comes to what should influence car insurance premiums, both men and women agree that claims history is the most important factor, followed by driving capability and age.
From there though, opinions divide – more than twice as many women than men believe premiums should be set by gender, while men believe location and occupation to be more important.
What the changes will mean
With just over a month to go before the new rules are introduced, there is still much confusion over what the changes will mean for drivers.
While two thirds (66%) of women are aware of the new rules, most underestimate the potential extent of the price rise. Two fifths (43%) estimate that their premiums will rise up to 15% – 10% less than the industry prediction.
Men have little or no idea how the changes will affect them – 45% admit to being unclear about the impact of the new directive and a further 16% believe their premiums will go up too.
How women would combat the ruling
Should premiums rise as much as 25% for female drivers, six out of ten women (63%) would be forced to find ways to cut the cost of their cover – 17% would downgrade their car to a cheaper and less powerful model, 14% would reduce their mileage and more than a third (35%) would take advantage of telematics technology to cut their premiums.
There is still time for women to beat the price rises by renewing their policy before the 21st December, but only 23% plan to do so – over half (54%) say they are willing to risk the rise and pay out in the new year.
Cheaper cover for men, price rises for women
Michael Ossei, uSwitch personal finance expert, says: “Statistically more likely to claim, men have grown used to paying hefty motor insurance premiums.
“Yet from next month, men will no longer be penalised for their ‘boy racer’ reputation and will be charged the same as women. For the first time ever, men and women will be driving on a level playing field.
“While millions of male drivers will be celebrating cheaper premiums, female drivers need to brace themselves for significant price rises.
“A little bit of research will go a long way towards limiting the financial impact of this judgement and not being forced off the road due to cost.”
What car insurers are doing
Car insurers are currently changing their risk and pricing models in order to offer ‘gender neutral’ quotations by 21 December.
From that date on, car insurance quote systems and broker services will not be allowed to take a driver’s gender into consideration when calculating premiums.
Mr Ossei continues: “It’s more important than ever that they shop around to find the best deal at renewal time – with over 100 providers on the market, there is a big difference between the cheapest and the most expensive quote.”