A European legal ruling could cost young women drivers 4,300 pounds extra in insurance premiums, warns think-tank
A European legal ruling could cost young women drivers £4,300 extra in insurance premiums, it has been claimed.
EU judges are due to rule on Tuesday whether charging women lower premiums than men breaches EU rules on sex discrimination.
If they do, female drivers under 26 are likely to see costs rise by about 25%, while men will see insurance rates drop by about 10%, according to the Association of British Insurers.
Open Europe, the think-tank campaigning for EU reforms, says that translates into an average extra £4,300 more for women drivers between the ages of 17 and 25, and a £3,250 saving for men over the same period.
In a "worst case scenario", women drivers' cumulative insurance costs could be as much as £9,300, says the organisation.
Basing insurance rates on statistics about the differing life expectancies or road accident records of men and women is standard practice across Europe. It is specifically permitted in EU anti-discrimination rules which allows member states to discriminate on insurance rates and benefits "if sex is a determining risk factor, and that can be substantiated by relevant and accurate actuarial and statistical data".
But an Advocate-General at the European Court of Justice has advised judges that the concession in the EU "Gender Directive" is countermanded by "higher-ranking" equality provisions set out in the Charter of Fundamental Rights in the Lisbon Treaty.
If that legal "opinion" is upheld in Tuesday's final verdict, it will mean insurers can no longer gender-based different prices on a range of products including car insurance, private medical insurance, pension schemes and annuities.
Open Europe Research Director Stephen Booth said: "Giving EU judges free reign to rewrite laws that the UK Government has signed up to in good faith can cause hugely damaging and unforeseen consequences. That these judges would magically rule that young women should pay more in the name of equality is simply perverse. Instead of making prices fairer between men and women, this ruling would increase costs for consumers taken as a whole."
The case was brought by the Belgian consumer's association, challenging the use in Belgium of statistics based on gender. But a ruling outlawing gender-based analysis for insurance purposes would apply in all 27 EU countries.
