Andrew leads our Operational Team and is our expert when it comes to all the ins and outs of car hire excess insurance.
The European Union Gender Equality ruling comes into force from 21st December. From this date insurers will no longer be able to discriminate against women by giving them lower premiums that reflect their lower risk profile.
Men should benefit from this ruling, though the consensus seems to be that premium increases for women will be far greater than the drops for men. The affect of gender on premiums reduces by age so drivers in their 40′s should barely notice any difference.
Research commissioned by the Association of British Insurers suggested young women's premiums would rise by an average of about 25% and men's would fall by 10%. These figures are for the 17-25 year old age group. The effect is greatest on the young drivers who haven't built up a no claims discount, so expect much greater changes for 17 and 18 year olds. Insurance for a 17 year old male can easily be 70-100% more than for a female so gender neutral pricing will have a far larger impact on young women.
Gender has been such a good indicator of risk that no insurer can afford to move first and act before the deadline as their policies would then be either uncompetitive (women) or unprofitable (men).
It's inevitable so is it worth worrying about?
For the older motorist, it's probably not worth worrying about and won't really make much difference.
Young female drivers taking out their first insurance policy may want to act before 21st December 2012. Young males will find it cheaper (and character building..!) to wait.
Young female drivers with renewals shortly after the deadline might be better off taking out a new policy before the deadline and cancelling their existing policy. However if you cancel the policy part way through a year, you probably won't gain an additional year of No Claims Discount which could be more valuable. Cancellation fees may also apply. Try running some car insurance comparisons with and without the extra NCD to see how much difference it makes. Finally, it could be worth contacting your existing insurer before the deadline to see what deal they could do renewing early. They may allow you the additional year's NCD in order to keep you.
Without gender, insurers will be looking for other ways to assess risk and may put more of a weighting on other existing factors like insurance group. engine size and performance. If the cars just happen to appeal more to young men than women expect premiums to rise more than average.
Expect to see a lot more use of telematics boxes by insurers. These devices monitor how, where and when you drive and where the car is left overnight. Some insurers will offer lower premiums or will only cover you if you avoid driving at "high risk” times of day – typically between 11pm to 5am. Actual policy terms vary by insurer, some reward you additional miles of use for good driving others charge by the mile or day and will adjust your premium according to how they rate your driving. Repeated "bad” driving may even result in the cancellation of your policy.