Really bad news, actually.
Because some faceless Eurocrats are planning to make womens car insurance much, much more expensive.
Currently insurers are granted an exclusion from sexual equality legislation that would otherwise prohibit discrimination between genders. The restrictions are very tight, the insurance company has to prove actuarily (using statistics) that women represent a lesser risk (or vice versa). This is true not just for car insurance products, but also for things like life assurance, because women live longer, on average.
For most motoring risks, women represent a much safer bet for the insurance industry, as the average expenditure on claims from women is very significantly less. That means womens premiums are usually lower, all other things being equal. In the case of young drivers, this difference amounts to many hundreds of pounds.
Now a Belgian consumer group has bought a case to the European court arguing that this isn’t fair, and astonishingly it is a female Judge Advocate who has agreed with them. Juliane Kokott, Advocate General at the ECJ is of the opinion that:
“Differences between people, which can be linked merely statistically to their sex, must not lead to different treatment of male and female insured persons when insurance products are developed.”
Kind of ignoring the fact that ‘mere statistics’ are the essence of the underwriting process. This kind of thing is the thin end of a very big wedge.
Ms Kokott’s logic is that people have no choice in their gender, so it is unfair to penalise (or conversely reward) them on this basis. But that is also true of age. Our home address, whilst we have some choice, is to large extent limited by our means and social background, as is the car we drive – otherwise there would be a lot more Ferraris and Zondas on the road.
And no-one chooses to crash, so surely our claims history couldn’t be described as a choice either. There isn’t much left to underwrite on.
If insurers aren’t allowed to use factors having such a large bearing on risk, we are at risk of an insurance industry where 50 year old women pay the same as a 17 year old man. Most people will end up paying more.
Either that or insurers will have to resort to using other factors to determine risk, in effect using weird proxies for things like age and gender. Do you fancy your insurance rate being determined by what’s on your iPod?
We may mock the Mail and Express for their dodgy ‘straight banana’ type stories, but on this issue we really are in danger of Euro-madness.
Read more: Mail, Telegraph, WSJ
Just to balance out this article in favour of cheaper womens car insurance, here is a female driver doing something silly – perhaps this is why the European Court don’t believe the statistics…
Stupid videos
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- The basics of auto insurance for women
- Womens Car Insurance & Trust
- Factors Affecting the Cost of Insurance
- Gender discrimination for pension annuities and motor insurance premiums
- Causes of Disability Claims
