Insurance for Women drivers goes up after EU Gender rules

Things keep changing…. For long Insurance was bookish ~ i.e., Insurers simply went by the book – ‘All India Motor Tariff’ which guided the rates, terms and conditions of coverage of a motor vehicle.  W hen everything was said in AIMT,  the only  factors for rating were the usage, cubic capacity of the car and the zone that the car would be used..  The Registration No.; Engine No. & Chassis No; model make, type of body; whether fitted with electronic equipments; whether owner has membership of Automobile association   etc., were the extraneous factors collected.    In some markets, there are various parameters that go into rating which could including the driving record, deductible, model, make, colour of vehicle, location and area of operation, type of driving (business, pleasure or rarely used), garaging, how much the vehicle would be driven or the mileage done, age of the driver, gender, whether a student,  the safety features installed in the vehicle, membership of associations, the profession of the person owning the vehicle  etc.,

Now a days, you see more cars driven by women – many of them are high end vehicles; there are a  handful of auto drivers too. There is some notion that women are mild mannered and calm at wheels; but poor when it comes to parking. Commonly when  a woman is involved in an accident, on-lookers tend to say that it was her lack of knowledge of driving that caused the accident ! – there are some women who venture out on bikes also !

For long,  discrimination in setting insurance rates was  permitted under EU equal treatment rules allowing the market to base the price of a financial product on the statistical likelihood of a person having an accident, falling ill or dying. Now with the gender bias ban, women will perhaps need to find different ways to prove they are safe at the wheel.  

There are reports that with the onset of new EU rules that ban setting prices according to gender, women’s car insurance would go up by £300.  According to a report in Daily Mail, so far, female driver was paying  £1,247 on average while a man was called to pay £2,004. It is stated that with the change in European rules banning Insurers from setting their prices according to a person’s gender. Women drivers are among the biggest losers; losing the advantage hitherto enjoyed over a man of the same age.   The ruling of European Court of Justice is  the result of a  ten-year legal battle against the proposals by insurers.

The good news for Insurers that their premiums would jump ~ the change applies to all insurance products so men approaching retirement will also suffer, because the value of annuities will drop. Currently, men usually get a higher pension payout than women because they tend to die at a younger age.

According to the  Office for National Statistics,  a woman will typically die aged 89, whereas the average age of death for a man is 85. The Association of British Insurers is quoted as saying that only new insurance policies and renewals will be affected by the rule change.

On a different plane, it was stated that women are more likely to be injured in car crashes because safety features are designed by men with themselves in mind, a study has found.  Daily Mail states that researchers investigated 10 years' worth of data on U.S. motor vehicle accidents and discovered female drivers wearing seatbelts were 47 per cent more likely to suffer serious injury than males.

Belted female drivers suffered more chest and spine injuries than strapped-in male drivers in comparable crashes, they wrote in the American Journal of Public Health.  Women also face greater risk of injuries to the lower parts of their bodies because of their shorter stature, discovered the researchers, who looked at statistics between 1998 and 2008.  The researchers found head rests did not take into account the differences in size and strength between men's and women's necks…

With regards – S. Sampathkumar

21st Dec 2012.

photos courtesy : www.dailymail.co.uk