21 December 2012

Gender Neutral Insurance Pricing Arrives

Good news for young male drivers, bad news for young women as the EU equality ruling is now in force. We look at ways to minimise your car insurance costs.

Young female drivers may see their insurance premiums almost double from today thanks to Gender Neutral insurance pricing. Younger women have been able to benefit from lower premiums than their male equivalents due to the FACT that they pose less of a risk and have lower claims.

The European Court of Justice ruled last year that this discrimination by gender in this way was unlawful under equality rules and therefore had to stop.

Young men should see benefits from the ruling though expect the insurers to be cautious and not simply split the difference between their old male/female rates especially in the short term.

So, what can young drivers do to keep premiums down? Now that we're gender neutral, this applies to everyone! Now that gender can't be used to assess risk, the other factors that they already use will be more important.

1. Shop around. It's obvious but the more insurers you ask the more likely it is that you will find the lowest quote available to you. Find cheap car insurance quotes with MoneyMaxim.
2. When you change your car or buy your first one, buy one that's cheaper to insure. Cars are rated for insurance on the basis of how expensive they are to fix, power etc.
3. Add named drivers. Not any driver, that won't help. But adding additional drivers with a good driving record (parents or older brother or sister maybe?) can make a big difference.
4. Improve security. If you access to a garage, kick out the rubbish in it and put your car there. If the garage is currently occupied with a parents car, it might be worth commandeering it if you can. Consider fitting an approved tracking device.
5. Reduce your usage. Lower mileage means lower premiums. Just don't be over optimistic about how few miles you will cover then exceed what you declare.
6. Get trained. Pass Plus or passing an Institute of Advanced Motorists test can be rewarded with lower premiums.
7. Consider insurance policies using a Telematics box. These measure your acceleration, braking, cornering, speed and where and when you drive. Don't take this route if you are a boy or girl racer as your insurance can be cancelled with repeated "bad” driving.
8. If you are buying a car, a sneaky option is to choose a car with a "girly” image. Insurers are not allowed to discriminate by gender but cars preferred by women will have better claim histories than the boy racers.
9. Pay a higher voluntary excess. The excess is what you have to pay if there's a claim, raising it reduces how much your insurer would have to pay out. It also discourages you from claiming for smaller incidents.

Paying a higher voluntary excess can make a big difference. Increasing from a £250 excess to a £500 excess reduced the best quote for a newly qualified 19 year old without a no claims history from £1224 to £1046, a saving of £178 or 14.5%. The only problem is that taking into account loss of no claims and not building a no claims history, you'd then need a claim worth about £1000 before it would be worthwhile making a claim.

An interesting solution to that would be to take out separate insurance on your insurance excess. There are now a number of companies that will offer you Excess Protection Insurance Policies, so when you claim on your main policy, the Excess Protection policy will pay you back the excess. You have to claim on your main insurance, so don't set the excess too high you may not be able to claim. But you can get £500 of excess cover for under £50 – what's more, it covers your home insurance excess too.

There are several companies offering "lifestyle” excess protection policies which will cover your excesses on your Car, Home, Travel, Pet and Health insurance policies. You can Compare Excess Protection Policies here and find one that fits your needs and save money on your car insurance at the same time.