Is car insurance sexist?

We are just days away from finding out if the European Court of Justice will rule that using gender as a basis for calculating risk for motor insurance is illegal.
On first impressions it sounds like a wave of fairness could spread across from Europe, lapping at our discriminatory shores and washing away the foamy scum of bias.
Except that it is likely to cause chaos in the insurance industry and make various premiums rise for many of us.

According to Simon Douglas, director at AA Insurance, the UK’s use of gender to calculate risk is already against EC law, but we have relied on derogations based on evidence of the UK’s risk-based approach to insurance.

If the differences between sexes are no longer taken into account then it won’t necessarily mean that young men’s premiums will fall quicker than a Middle Eastern country’s rickety dictatorship.
Instead, it is very likely that young women’s insurance premiums will increase, in some instances perhaps as much as by 50%.
It also puts a question mark over specialist car insurance for women, such as Sheilas’ Wheels.

The AA says insurers may start using other risk factors, such as occupation or vehicle type, as a proxy for gender but it isn’t clear whether this would be permitted because it could constitute a form of indirect discrimination.
The Guardian suggested that there was a remote possibility that the UK would thumb its nose at the European meddling; after all, the government managed to delay doing anything about driving and diabetes after the EC amended the laws.

The ramifications of this court ruling will also affect other areas, like retirement income and private medical insurance, with different winners and losers here as well.
If the ECJ rules that gender-pricing must be banned then experts warn that the majority of us will be worse off in the short term because the response by insurers will be to pass on the costs.

If you’re a young woman thinking about buying your first car then the AA suggests that you take advantage of lower premiums while they last; young men should probably delay their decision until after any announcement is made.

More articles can be found on the Keep me on the Road transport law blog. For further information contact Anton Balkitis or Lucy Wood on 0800 046 3066 or visit Rothera Dowson’s road traffic law website if you are looking for a personal or commercial transport law solicitor.