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.
TV ad campaign heralds Motor Insurance Law change
Motorists in the UK are being reminded via a TV advertising campaign of new rules regarding motor insurance that come into force on June 20, 2011.
The new rules make it an offence to keep an uninsured car rather than the previous rules which just made it illegal to drive an uninsured car. Motorists still have the option to declare a car as off-road with a SORN (Statutory off-Road Notice).
The new rules mean that it is no longer acceptable to keep a car taxed for the full year, but only insured for part of it – this will particularly affect owners of classic cars, motorhomes, motorcycles etc., who may not insure their vehicle over winter months when not in use.
The move to tackle uninsured drivers has been welcomed by the British Insurance Brokers’ Association (BIBA):
Graeme Trudgill, BIBA Head of Corporate Affairs, said: “The enforcement of the new law is a bold move to tackle uninsured driving and will make the roads safer. The TV campaign is a welcome Insurance industry initiative that will help raise awareness of the new law.”
It is estimated that there are 1.4 million uninsured vehicles in the UK. Under the new rules motorists face an escalating series of potential penalties for owning an uninsured vehicle. This starts with a warning letter, a £100 fixed penalty, through to clamping, seizure and destruction of the vehicle, up to a prosecution and a £1,000 fine.
The DVLA regularly checks the Motor Insurance Database (MID) to see if registered vehicles are insured. You can check for yourself if your vehicle is insured on the askmid website for free – click here.
Or you can check with your insurance representative to ensure covers are in place.
BIBA has described the law change as the biggest change to motor insurance law since the Second World War.
Source: BIBA