The European Court of Human Justice has ruled that as of the 21st December 2012 Gender is no longer allowed to be a factor when calculating motor insurance premiums.
Motor Insurance premiums are based on averages and past experience, by taking this statistical data into account, Insurers are able to offer their best possible premium to their specific target market which takes into account a number of rating factors such as where you live, how old you are, what car you drive and your claims history.
It is widely accepted that male drivers will cost insurers more in claims payments than female drivers. This has been proved over many years.
With this ruling the EU has taken away the right for insurers to use one of the basic statistical rating factors.
This in my opinion will have a negative impact for consumers. The more an insurer is able to break down a risk, the lower it is able to charge to end consumer, taking away such an important rating factor will only result in premiums increasing as insurers will be looking to build in a “margin of error”.
Contrary to popular belief motor insurance is not a very profitable business for insurers, it is break even at best and with insurers coming under increasing pressure to increase rates due to increasing claims costs as a result of personal injury claims and increasing repair costs, my concern is that as a result of this EU gender ruling we will all end up paying more for our motor insurance.
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