The entire landscape of the UK car insurance market has now changed after the EU gender directive has come into force and women will no longer receive reduced rates from insurers.
The new rules came into force on 21st December and only time will tell exactly what impact they have on drivers’ finances as we get further into 2013.
The specific parameters regarding the new rules mean that insurance companies will no longer be able to use a person’s sex to determine their premium.
It is widely thought that insurers will use a stricter assessment of other criteria in order to determine the structure of future polices. Factors such as existing medical conditions as well as the employment status of an individual will be heavily scrutinised in this regard.
Raj Mody, head of pensions consulting at PricewaterhouseCoopers (PwC), looked specifically at the changes which women can anticipate as a result of the new directive.
“While a small number of women will be better off from the ruling, eight out of ten annuities currently sold in the UK are bought by men, so many more people risk losing out than gaining,” stated Mody.
Life insurance policies will also be affected by the new ruling. Women can expect to pay an average of 23% more for a life insurance policy, with men enjoying an average reduction of 3% in contrast.
However, it is undoubtedly car insurance where the effects are most likely to be felt. The British Insurance Brokers’ Association (BIBA) estimates that premiums for young female drivers are expected to increase by anywhere between 15% and 38%.
Such a change in the landscape of how premiums are calculated could have a major bearing on the point at which young drivers are in a position to purchase their first car in the future.
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