Insurance premiums set to rise
Robert Powell hits the streets to get your take on whether gender should affect how much you pay for insurance
Are pensions sexist?
Probably not a question you ask yourself everyday; but that’s exactly what the European Court of Justice is making a ruling about on the 1st March.
It’s alleging that the fact that men get a higher monthly pension payout – due to their shorter life expectancy – is actually discrimination.
If this ruling does goes through, it will have a knock on effect for car and life insurance; two other products that also take gender into account when setting rates.
Find out why car insurance premiums are about to rise.
Life insurance
According to the latest ONS figures the life expectancy at birth for males is currently 77.9 years while for females its 82 years – a gap of over four years.
If the European Court ruling goes through men could find themselves paying less for life insurance, while women will probably end up paying more.
The main factor a life insurer will look at when setting premiums is your age; the older you are – the more your pay.
They’ll also look at your medical history, the average life expectancy of your postcode, your job and if you’re a smoker.
Car insurance
Statistically male drivers will claim more on their car insurance than women.
Figures show that men are 70% more likely to be in a serious crash and hence make a large car insurance claim.
But this could be down to the fact that men do around 60-65% more driving in total than women.
If the court ruling goes through then women younger than 25 may see rate hikes of up to 60% and it could spell the end for women only car insurers like Sheila’s Wheels and Diamond.
Like life insurance, your age will have a big impact on the car insurancepremium you get – with young male drivers paying the most.
The make and power of your car as well as the number of crashes and amount of crime in your local area will also affect what rate you get.
Whatever verdict you think the European Court should reach; this case does raise the question of what’s fair to set insurance rates by.
Yes, providers have to generalise when setting insurance premiums; but where do you draw the line between efficient quoting and plain discrimination? Have your say in the comment boxes right here at lovemoney.com.
More: Get a great deal on car insurance and life insurance with lovemoney.com | Why women should pay more for car insurance | Why your car might not be there in the morning
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Comments
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As insurance is basically a gamble for the insurance company when it provides cover, it stands to reason that they set the odds, based on the risks (they still have to be competitive tho). Imagine if the bookies were taken to court for racism having offered lower odds for England beating Ireland at cricket (ah! bad example).
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Well, maybe I'm wrong. On the BBC last night they were saying that men would possibly see a "slight" decrease in their premiums. What next though? Young men complaining that they have to pay more than older drivers? The insurance companies might as well shut down their actuarial department and save a bit of money.
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As I said elsewhere, I note that women will have to pay more, not men less. But when it comes to pensions, men will get considerably less, not women more. The insurance and pensions industries must be rubbing their hands together with glee while the reduction in spending power of old men and young women will not help our economy at all.
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04 March 2011