Female drivers hit by 50% insurance rise

EU ruling means young women paying more. Picture: Robert Perry
EU ruling means young women paying more. Picture: Robert Perry
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INSURANCE premiums for young female drivers have increased by as much as 50 per cent over the last month after an EU ruling which prevented insurance companies from making young men pay more.

The EU gender directive, which came into force in December, was opposed by insurers who said it would prevent them from giving cheaper insurance to female drivers even though they were less likely to have accidents.

Figures now show the ruling has had the effect of increasing insurance for 17 or 18-year-old girls by 50 per cent over the last month, bringing the annual average yearly rate up to £1,965.

Michael Ossei, personal finance expert at uSwitch.com, says: “Young women who have just passed their test may well wish that Britain had never stepped foot inside the EU. A 50 per cent rise in premiums could have a devastating effect on newly qualified women trying to get on the road.”

Before the gender ruling came into force, insurance experts predicted premiums for young female drivers could rise by as much as a third. Analysts said it would take a while before the full impact of the changes was revealed.

For young women in the 19-21 age group, prices have already increased by a third, according to the survey of insurance premiums carried out by uswitch. The research shows car insurance for women has risen by eight per cent on average, while prices for men have dropped by six per cent.

On average, men are still paying more for their insurance than women – however the gap is narrowing. Previously, men paid 14 per cent more than women on average. Now they pay two per cent more.

Mr Ossei said: “Despite the shock hike in female premiums, 17- and 18-year-old men still pay the most for their car insurance. It’s our hope that the relentlessly high premiums do not discourage young people from learning to drive.

“The gender gap may be narrowing but it’s as important as ever to shop around to find the best deal at renewal time.”

AA Insurance expert Ian Crowder said he was not surprised insurance premiums for young women had increased.

He said one way young people could bring down costs was by opting for a telematics – or pay as you drive – system.

“Pay as you drive measures the way you are driving – it measures your speed, cornering, acceleration, braking and scores you on that basis.”

He said new drivers who scored well could see reductions by as much as 50 per cent in their premiums. Mr Crowder said he believed the market was still adjusting to the gender directive but that prices were not likely to rise further.

“I think we will see prices come down. We are in a competitive market and insurers do not want to price themselves out of the market.”

He said the most important thing for motorists was to shop around to ensure they were getting the best deal.

Discount website myvouchercodes.co.uk revealed the changing cost of car insurance was leading to more people searching online for discounts. The money-saving website said searches for car insurance discounts had risen by 506 per cent during December as people switched insurance policies to avoid the increases.

Mark Pearson, chairman of MyVoucherCodes.co.uk, said: “The EU gender directive has clearly sent Britons into a spin, as many women will have seen their premiums take a huge leap in cost, which they may not have been able to cope with financially.”