Brits brace for unisex car insurance

Insurance companies in the European Union will no longer be able to use gender as a factor when they calculate car and life insurance rates.

By MSN Money Partner Dec 11, 2012 5:31PM

This post comes from Des Toups at partner site CarInsurance.com.

 

CarInsurance.com logoThey call it the Gender Directive.

 

Image: Europe (© Photodisc/SuperStock)Really, they do.

 

Starting Dec. 21, insurance companies in the European Union won't be able to use gender as a factor when they calculate rates for auto and life insurance.

 

If you are a British man, you are probably very happy, because you pay a lot more for "cover" than your fairer-sex counterparts. For example, personal finance site Confused.com says the average British man under 20 pays $4,675 a year, but the average woman under 20 pays $2,441.

 

Britain, Ireland and Italy are expected to see the greatest changes in rates in the wake of a European Court of Justice ruling last year, which extends its 2004 Gender Directive into the realm of financial and insurance contracts.

 

No one knows exactly how the EU's chromosome-agnostic car insurance rates will shake out, but experts expect a dramatic rise in what female drivers pay -- especially the young ones. Online shopping site Gocompare's head of motor insurance, Scott Kelly, says: "We expect to see premiums equalized at the higher male rate rather than the lower rate for females."

 

Heres what the difference between the sexes looks like in the U.S. for young drivers, based on a sample of 60,000 car insurance quotes delivered through CarInsurance.com's comparison engine:

 

Age

 Female

 Male

Difference

16

 $3,689

 $4,287

16%

17

 $3,399

 $3,682

 8%

18

 $3,003

 $3,305

10%

19

 $2,371

 $2,627

11%

20

 $2,260

 $2,502

11%

21

 $2,014

 $2,239

11%

22

 $1,897

 $2,033

 7%

23

 $1,791

 $1,857

 4%

24

 $1,713

 $1,790

 4%

25

 $1,616

 $1,593

-1%

 

As in Britain, differences in rates largely disappear as young drivers mature. Of course, sex is only one of many things car insurers look at (in the U.S., your ZIP code and your own driving record are among the biggest factors).

 

Polling by shopping-comparison site uSwitch.com says as many as one in 10 British women might stop driving altogether. Experts also predict a stampede toward usage-based car insurance programs that monitor driving and deliver large discounts to the safest drivers.

 

Women will also get hit on the life insurance side, where their longer lifespan historically has meant cheaper prices. But they also may get higher pension payments in return.

 

More on CarInsurance.com and MSN Money:

VIDEO ON MSN MONEY

2Comments
Dec 12, 2012 10:57AM
avatar
Insurance is a lottery. All pay in. Some get paid. All get skimmed. If not, insurance goes broke.
Dec 12, 2012 10:42PM
avatar
"We expect the premiums equalized at the higher......". Duh, now what else would we expect.
Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

How much to insure that car?

Check out rates for more than 850 vehicles.

Step 1
Location
Step 2
Vehicle make
Vehicle model