herald

Sunday 17 December 2017

INSURANCE

New rules on women drivers

NEW European rules came into force today meaning that insurers cannot now charge different premiums based on gender.

Traditionally, women have had lower car insurance premiums because they are statistically less likely to have accidents than men.

It follows a March 2011 European Court of Justice ruling outlawing insurers from charging men and women different prices on grounds of sex discrimination.

The move is likely to lead to higher insurance costs for consumers, particularly for women drivers below the age of 25.



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It has drawn criticism from insurers who say gender is a strong determinant of how likely a person is to claim and should be reflected in the premiums they pay.

Insurers could try to sidestep the ban by basing their pricing on proxy gender indicators such as the customer's profession or model of car, although this would be vulnerable to legal challenges, experts say.

The ban was also expected to boost demand for so-called telematics insurance, where insurers monitor customers' behaviour through devices installed in cars.

The companies then charge according to how riskily they drive, irrespective of gender.

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