EU Gender Directive: will Women pay more?
From 21 December 2012 insurers will no longer be able to use gender as a contributing factor when calculating insurance premiums. Typically, women have had access to cheaper premiums for policies such as life and car insurance, because they are considered to be lower risk.
However a ruling from the European Union recently has banned insurers from using gender as a factor when calculating premiums from the end of the year, and this will mean that women will end up paying more than they currently do.
This has prompted many industry related firms to advise female consumers to switch their car insurance provider before the ruling comes into effect, if their policy is due for renewal after 21 December, as they could save money in doing so. Aviva said that younger female motorists will ‘almost certainly’ save money by switching insurance providers, but there are also a few things to consider.
One of these is that there are sometimes exit charges for early surrender of policy, and this could be as much as £50. As well as this it is worth considering your no claims bonus. If you surrender your policy with an insurer you effectively give up any no claims you have earned, as the policy must run for a whole year in order to count. If the savings made by switching do not outweigh the costs of switching, then it is not worth doing.
The problem with working out whether it is worth doing is that insurers have failed to disclose what difference the gender directive will have on prices, and subsequently consumers do not know exactly how much more they will be paying.
What is for sure is that women will end up paying more for insurance policies, and the Association of British Insurers (ABI) has predicted that the average rise in premiums for younger female drivers will be around 25pc.
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