The insurance industry is about to face a massive shake-up as new regulations will make it illegal for providers to charge premiums based on the policyholder’s sex. Car insurance is predicted to drastically increase next year after the EU Gender Directive comes into force later this month. So, are you ready for the big G-Day?
In March 2010 the Court of Justice for the European Union ruled that the use of gender as a calculating factor for insurance products is discriminative. The aim of the new reform is to eliminate inequality between men and women. The difference in premiums between men and women can be extremely high in some cases, so the EU ruled that this is fundamentally unfair and everyone should pay the same.
The difference in premiums and benefits increasing amongst men and women in the calculation was abolished in December 20007 and after a five year period, the legislation has been reviewed again with a ruling for unisex premiums applicable from 21 December 2012.
The way that the insurance will be calculated from now on means that those who have been paying less, which is largely women, will be charged more to match their male counterparts. The premiums that men pay won’t be reduced to match those of women.
The new EU law does not just affect car insurance. It also applies to life insurance, health insurance and other premiums. This could be seen as bad news for women, who typically get a better deal on insurance policies.
For example, young women could end up paying a staggering £500 more for car or life insurance when the new rule comes into force. According to The Guardian, women have often paid less than men for life and motor insurance because statistically, women are likely to live longer and are involved in fewer road accidents.
The insurance industry predicts that the average car insurance price is set to rise by a massive 25% for young women and as much as 20% for life insurance premiums. Some insurers have already changed their pricing structure, but others have still not announced their new charges, so it could be worthwhile shopping around for budget car insurance now to get a head start on the industry.
It’s not just young female drivers aged 17-22 who face a painful price hike though. Even those in their 40s could see insurance policies rocket so it’s crucial that everyone reviews their current policies to check exactly what prices they are paying.
If your car insurance is up for renewal soon, there’s still hope that you could squeeze in a valid cheaper quote before the ruling comes into force. In most cases, car insurance quotes are valid for 90 days which means that if your policy is not up for renewal until March you might be able to get a cheaper quote now.
However, some insurance companies are cutting the length of time a quote is valid down to 30 or even 14 days to combat this.
If you’re looking to get a better deal on your car insurance, it’s worth shopping around. Click here to see if you could get cheaper car insurance with Express Insurance today to ensure you’re prepared for the forthcoming changes to the UK insurance industry.