Women drivers are facing a big hike
in costs after the European court ruled insurance companies should not take
gender into account when arranging cover.
The European Court of Justice in
Luxembourg decided that it was discriminatory for insurers to base premiums on
the differences between the sexes.
The new rules will come in to force
on 21 December this year.
Currently insurance companies
across Europe base cover charges for drivers on the differences in life
expectancy and accident statistics, which benefit women.
The judges based their ruling on
the Lisbon Treaty, which includes the Charter of Fundamental Rights, and aims
“in all its activities, to eliminate inequalities and promote equality
between men and women”.
The Association of British Insurers
(ABI) believe the courts equality ruling will see women drivers under 26
facing a 25 per cent rise in premiums while men can expect a 10 per cent drop.
MEP Sajjad Karim said the Euro
ruling was “utter madness” and a “setback for common
He continued: “It is a
statistical reality that young men have more accidents than women so it should
be reflected in their premiums.
“This is a victory for boy
racers and a major blow for both democracy and careful women drivers.”
Simon Douglas from AA Insurance
said: “The use of gender in calculating insurance risk has been a
fundamental principle of the UK’s risk-based motor insurance structure for
decades, although it has been a thorn in the EC’s side since 2002.
The ABI forecasts that for
annuities, men approaching retirement could face an 8 per cent cut in rates,
while women in a similar position could face a 6 per cent rise.
Similarly for life insurance, men
could see a 10 per cent fall in costs, while women’s rates could rise by as
much as 20 per cent.