Middle-aged drivers may face hike in insurance premiums
Published 04/01/2012 | 05:00
MIDDLE-aged drivers could end up paying more for motor insurance if the EU goes ahead with proposals to ban insurers charging people based on their ages.
The planned directive on pricing based on age and disability would mean some types of insurance would no longer be available, experts said.
Later this year a European Commission directive will ban insurers from using gender when calculating insurance costs. The new rules are expected to drive up the cost of insurance for women while lowering costs for young men.
Now the EU is looking at stopping insurance companies using someone's age as the basis for an insurance quote.
This would make it impossible to charge younger drivers more for insurance even though they have more accidents.
And the over-70s, who have more accidents than those in their 30s, 40s, and 50s, would also see premiums coming down.
But those aged between 30 and 60 could end up paying more for motor insurance, Jim Murphy of the Society of Actuaries in Ireland said yesterday.
"If risk factors such as age and disability should be ruled discriminatory, as was the case for gender in the landmark ruling of the European Court of Justice in March 2011, certain types of insurance cover could become unavailable," he said.
Mr Murphy said a rule banning age from being used to calculate insurance premiums would make it impossible to offer pension annuities.
EU officials are also considering banning the use of sexual orientation and religious beliefs when pricing insurance.
Mr Murphy said restricting age as a way of pricing insurance would mean it would not be economic for young people to take out life insurance.
From the end of this year insurers will no longer be able to use gender when calculating insurance costs.