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Insurance bridges the gender gap – but what is really causing premium increases?Back

Car insurance premiums increase for women

The European Court of Justice recently ruled that car insurance companies can no longer charge different premiums based on gender. As of December 2012, the car insurance costs of women – who currently benefit from lower premiums – will be going up.

But increases for women will also likely lead to decreases for men, and we believe the changing demands of the car buying public, coupled with events over the last six-months, will have a greater impact on motorists renewing their policies this year.

Everyone’s insurance premiums will be increasing this year as the bad winter led to a surge in claims that the insurance industry is now passing on to motorists. But another significant factor in the increasing cost of policies is the rapidly rising number of personal injury claims. Despite the number of road accidents falling year-on-year, the number of compensation claims rose by 30% this year, which has driven motor insurance costs up by approximately 40%.

Balancing this is the demand for smaller, less powerful cars that attract lower premiums. As petrol prices continue to rise, British car owners are increasingly looking for cars that are cheaper to run and maintain. Europe’s top ten selling cars in 2010 were all superminis or hatchbacks and demand for economical cars is outstripping supply in the UK.

In theory average premiums should decrease as drivers switch to more economical vehicles. But poor weather and an increase in personal injuries claims look set to drive increases this year and leave motorists further out of pocket.

So sure, the European Court’s ruling is going to push up car insurance costs for women, but their premiums would have shot up this year regardless. In many ways it is still your motoring choices, and in particular the car you drive, that will help you reduce the cost of insurance – not your gender.

Posted by Neil Addley on 18/03/2011