Insurance Costs for Young Drivers
AcclaimDriving’s view is that insurance premiums should be fair for both sexes and should be based on the persons driving record and any additional training that the person has undertaken to improve their driving skills. Young drivers should be encouraged to take these courses and once improved driving skills are attained they should be rewarded by the insurance companies with lower insurance premiums. Young people are currently often unfairly penalised by insurance companies and cannot afford to buy and insure a car of their own.
By The acclaimdriving team on 9th December 2011 in News
Car insurance bills to rise for women but fall for boy racers under EU ruling
An EU ruling which will slash car insurance costs for ‘boy racers’ could lead to more deaths on the road, experts have warned.
The Government fears that forcing insurance companies to charge men and women the same premiums will lead to young men using the extra cash to buy faster cars.
The European Court of Justice made its gender equality ruling despite the fact that young men are ten times more likely to be involved in a serious crash than a woman.
A Treasury analysis of the costs of the ruling revealed that women of all ages would see their car insurance premiums increase by up to 24 per cent on average. Meanwhile, young men would see their premiums fall on average by nine per cent.
Is this fair when statistically women are the safer drivers and have far fewer accidents.
Male drivers under 25, who currently pay an average of £2,090 a year for their car insurance, could see their premiums fall by £188 a year.
But female drivers of the same age, who pay £1,360 a year, could see their premiums jump by a quarter, or £326 a year.
Overall, women of all ages would end up paying £900million more for car insurance than today. Men would see premiums fall by£600million.
The report said: ‘In the field of motor insurance, studies have indicated that gender-neutral pricing would have consequences for road safety.
Fears are that as premiums for (generally higher-risk) male drivers fall, then they may purchase higher-powered cars, or increase the riskiness of their driving.
Comments on these proposed changes:
Professor Stephen Glaister, director of the RAC Foundation, said: ‘This is not an abstract issue confined to a cosy courtroom but a matter of life and death. Before ministers accept any change they need to know what the impact will be in terms of people being killed on the roads.’
Adrian Webb, spokesman for Sheila’s Wheels, which specialises in insurance for women drivers, said: ‘Twenty-five times more young men are convicted for dangerous driving in the UK each year than women of the same age.
‘An unintended consequence of female to male insurance cross-subsidies will be that boy racers will find themselves able to afford insurance for more powerful cars than currently which could in turn lead to more accidents at their hands.’
AcclaimDriving’s view is that insurance premiums should be fair for both sexes and should be based on the persons driving record and any additional training that the person has undertaken to improve their driving skills. Young drivers should be encouraged to take these courses and once improved driving skills are attained they should be rewarded by the insurance companies with lower insurance premiums. Young people are currently often unfairly penalised by insurance companies and cannot afford to buy and insure a car of their own.
The European Court of Justice, which interprets EU law to make sure it is applied in the same way in all EU countries, gave its judgment in March. In a case brought by a consumer group in Belgium it banned insurance companies from making risk assessments based on a person’s sex. The judges said that the Lisbon Treaty – on which the British public was denied a referendum by the Labour government – includes the Fundamental Charter of Human Rights.
This aims ‘in all its activities, to eliminate inequalities and promote equality between men and women’.
The ruling will come into effect in December next year.
Treasury officials say they are disappointed by the judgment, but that is binding in UK law.
Next spring they will begin introducing the changes needed to make British law to comply with it.
