Gender prejudice in insurance outlawed

Picture of blue Daewoo Matiz at Boxhill in EnglandBBC News - Insurance and pension costs hit by ECJ gender ruling

The European Court of Justice today ruled that it was unlawful for insurance companies to charge different premiums for male and female customers, which means that premiums are likely to rise for women substantially (about 25-30%) and fall for men rather less so (about 10%). The ruling also applies to pension annuities, which pay out less annually for women because they live longer, which is likely to equalise pensioners’ annual income in women’s favour.

I’m more interested in the car insurance situation, because premiums are high for young people of both sexes and staggeringly so for men. The British Insurance Brokers’ Association (BIBA) quotes an average 18-year-old man’s premium is £4,400 while a woman of the same age pays £2,700. Clearly, women will not be happy at having to pay more (and it is unlikely to come down much for men, because insurers will jump at the chance to simply make more money out of this) and insurers are defending the status quo on the grounds that “taking a person’s gender into account, where relevant to the risk, enables men and women alike to get a more accurate price for their insurance”. Graham Trudgill claims that women will now pay “a cross-subsidy” for males through their premiums.

As a man in my mid-30s, I missed the extremely high premiums that young men are paying today; when I was at college in the mid-1990s (age 19-20), my premiums for third party, fire and theft on an early 1980s Vauxhall Cavalier were around £500. Recently, we looked around for a premium for my fully comprehensive insurance on my 1ltr Daewoo Matiz and the lowest was somewhere over £300; some companies wanted £800 or much more. How they can justify the extremely high cost of insuring a young man on a small car is difficult to make out, although whether these are quoted premiums or actually paid ones is not clear; some insurers will quote higher premiums so as not to insure a particular group, while others will simply refuse to serve them.

The claim about women “cross-subsidising” male premiums is offensive to male drivers who do not drive recklessly. I have been driving for more than 15 years, and have had three minor accidents, if I remember rightly, but never so much as a speeding ticket. Why should I pay more to cover for other men’s bad driving than my sister does? It is no longer legal for potential employers to refuse to hire a young woman, or to ask questions about her intentions to marry or have children, in case she may need time off shortly to have a baby, or two, when this is likely to cause the employer great inconvenience even if the state picks up the bill for maternity leave, particularly if a small business is involved. Whether this happens or not is immaterial; the point is that it is illegal, while charging prejudicial premiums to young men, regardless of their history as a driver, has until now been legal.

Prejudice is prejudice; it means judging someone on the basis of what others who look a bit like them did. Being expected to pay slightly more for insurance than an equally good female driver is one thing, but being ripped off to the tune of more than £1,000 is simply unacceptable, and would not have been accepted if women had been disadvantaged (or, needless to say, if race had been the factor rather than sex). It is a good thing that the European Court of Human Rights has seen sense and brought these profiteers to book, which our politicians have never had the guts to do.

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