Insurance costs hit by ECJ ruling
This March the European Court of Justice ruled that insurers can not charge different premiums because of a person’s gender as this action would constitute discrimination.
Even though women are statistically less likely to make a car insurance claim, they can no longer be charged lower car insurance premiums than men. This ruling throws out the risk-based pricing model that U.K. insurers typically use to provide discounts to groups that are statistically lower risk. Insurers may now choose to look at additional ratings factors such as placing more weight on the type of car being driven and the likelihood of it being involved in a claim.
Some commentators have claimed that after these changes are implemented women under 25 years old could see car insurance rates rise by up to 25%. Insurers have long fought against this ruling which was initially brought to court following a challenge by Belgian consumer group Test-Achats. The ruling comes into effect on 21 December, 2012 giving Governments and insurers time to adjust, although it is possible consumers will see the change in premiums before this date.