Sunday 22 April 2018

Women drivers face hike of €100 in insurance rates after EU ruling

traffic jam 3
traffic jam 3
Aideen Sheehan

Aideen Sheehan

WOMEN drivers face a motor insurance hike of up to €100 by the end of the year, when new rules kick in banning gender discrimination.

Women currently pay much less for insurance than men because statistics show them to be less risky drivers. But an EU ruling will ban companies from charging different insurance rates to men and women from December.

For the first time, the financial impact of the ruling can be revealed -- an expected 11pc increase in motor premiums for young women drivers.

Men will enjoy just a small decrease in premiums, according to a detailed, Europe-wide study obtained by the Irish Independent. New life insurance premiums for women are also set to jump by up to a third in line with the ruling.

And the increases could be even worse than economic consultants Oxera predicted in its report. While the insurance industry here remains tight-lipped about the scale of increases, one Irish motor industry source said young female drivers may suffer even larger increases of up to 25pc.

That's because Ireland, like the UK, has a particularly large gap between male and female premiums -- with young men here sometimes paying twice as much for insurance.

For example, a male driver aged 21 could expect to get a car insurance quote of €1,632, while a woman of the same age with the same car would be quoted just €885 with the same insurer.

So if the young woman driver suffers an 11pc rise in line with the report's predictions, then she would end up paying an extra €97 a year.

The Oxera study examined countries that have already introduced unisex pricing and recorded how overall premiums went up in these places.

In Belgium, for example, premiums for young females rose by 7pc-15pc while for men they fell by only 3pc-4pc.

The average motor premium across all drivers in Ireland is €560, although young people tend to pay a lot more.

The expected rise in premiums for women drivers follows a host of recent hikes in the cost of running a family car.

A 2pc insurance levy kicked in this year while the rising cost of petrol, diesel, car tax, VAT, and carbon taxes have all made driving increasingly expensive.

A car now costs over €100 a week for the average family.

The Irish Insurance Federation (IIF) said that while young women will definitely be "the big losers", young men will not necessarily enjoy a corresponding drop in motor premiums.

"Young women will see an increase, young men may see a decrease, but it's likely to be smaller," according to IIF director of non-life insurance Michael Horan.

Male premiums are not likely to fall as much, because substantially cheaper rates could lead to a surge in young men getting policies, which would lead to more claims and costs.

Life insurance premiums will also rise by 34pc for women, and pension annuities could rise by 5pc, said Oxera.

Currently life cover is around 25pc lower for women.

The change comes in on December 21 as the result of a European Court of Justice ruling that companies can no longer discriminate on gender.

Irish Independent

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