Unjustified Car Insurance Rises for Women in Dec

(46 Posts)
Crappers Sun 18-Nov-12 10:08:01

Hi all

Car insurance for women will be increased on the 21st December. This is driven by the EU ruling to bring women car insurance in line with men in the UK. The average price increase is between 14% to 4%.

Out of desperation/exasperation, I have wrote to the Financial Ombudsman Authority requesting that they have a look into this.

I feel that this is grossly unfair for a number of reasons. Firstly, car insurance like all insurances is costed based on statistics, probability of riskiness of an individual, taking into account personal circumstances, age, area, type of car driven etc etc. Statistics have demonstrated that women is generally a safer car driver hence the our insurance is priced in reflection of our perceived lower risk.

By bringing the pricing for women in line with men, the EU ruling is distorting the fundamental way in which the car insurance market operates. This is almost akin to putting an artificial price floor for women.

I am surprised that the government haven't step in to do something about this.... It feel women has been dealt with yet another blow on top of the austerity measures. This will drag women into a further financial hardships and I hope something can be done about this before women gets dragged back into the darkness of the Victorian times.

I hope Mumsnet can lend some support/voice to this given that women particularly mums will feel an ever tightening squeeze on their household budgets.

Thank you
Crappers

1sassylassy Sun 18-Nov-12 16:45:34

Sorry but with three ds,s I am looking forward to them paying a fairer price for insurance than subsidising young girls.
I hope Mumsnet can lend some support/voice to this given that women particularly mums will feel an ever tightening squeeze on their household budgets. you have to remember that a lot of us mums have dh,s dp,s and ds,s who will benefit from this,also the older you get the less it will effect you as older drivers pay virtually the same premium regardless of gender.

Young men don't subsidise girls; in fact this ruling will mean the exact opposite situation. Higher premiums for young men reflect the fact that they are more likely to be the cause of serious (and costly) accidents. Women will now have to shoulder some of these costs. How is this fair?

ForkInTheForeheid Sun 18-Nov-12 16:58:23

I agree it's absurd and if taken to its logical conclusion would result in a completely different insurance system. Either insurance companies/underwriters are allowed to use actuarial judgements to determine premiums or they are not. I don't see how premium adjustment due to gender can be deemed discriminatory when other factors (such as age) will continue to be allowed in making calculations.

Crappers Sun 18-Nov-12 22:18:03

Hi as far as i understand, the ruling will affect women irregardless of your age. So the thinking that, the older one gets, the level of premiums is less or uu

riksti Sun 18-Nov-12 22:22:06

So what about the calculation of pension annuities? The other side of the coin? Women's annuities are equalised with men whereas up to now they've been lower since women are expected to live longer. Are you happy for that change to be overturned a well? I don't think you can have one without the other.

Crappers Sun 18-Nov-12 22:22:32

Sorry pressed the button too quick! The new EU ruling will affect women drivers irregardless of their age. The thinking that older drivers will pay the same premium irregardless of gender is now invalid. Further more, with the premium increases for women, it does not mean that the premiums for men (young or old) will come down.

Crappers Sun 18-Nov-12 22:41:57

Women reaching retirement with defined contribution or money purchase pensions will be offered higher annuity yields as insurers are prevented from punishing them for living longer by reducing their income. However, the real reality of this is, unfortunately far fewer women than men buy annuities so there will be more losers than winners overall..... And women l

Crappers Sun 18-Nov-12 22:46:20

....Pressed the button too quick again! Women look set to be the biggest losers as from the equalisation of insurance premiums, irregardless of the facts of lives or claims experienced. It is demonstrated statistically that men tend to die younger than women and young men are much more dangerous drivers than their female counterparts..

TheDoctrineOfSnatch Sun 18-Nov-12 22:46:41

Crappers the impact of a lower annuity rate is far greater than that of lower insurance premiums.

Men's premiums are expected to come down.

Premiums can still be age related on grounds that, through a lifetime, one benefits and loses out at different stages.

I am a feminist who supports this change. It would not be acceptable for premiums to be lower for e.g. Jewish people and higher for Buddhists even if there was shown to be a statistical link re accident frequency. I see this the same way.

TheDoctrineOfSnatch Sun 18-Nov-12 22:48:20

And I don't believe the Financial Ombudsman can help - that office broadly investigates breaches of practice by regulated firms, not the setting of laws.

DilysPrice Sun 18-Nov-12 22:58:07

This has gone way beyond anything the Financial Ombudsman has power over, it implements a fundamental principle of EU law.

And as a feminist I generally object to treating individual men and women differently because of differences in behaviour/psychology on average; it's a very short step to "women take more sick leave/will just get pregnant and leave/can't do maths".

Crappers Mon 19-Nov-12 01:54:26

Financial Ombudsman was out of sheer exasperated folly..... Fundamentally, there is no difference between a Jew or a Buddhist or individuals of any religious beliefs. However, I believe there are distinct differences between gender, in how we are wired to think and hence our innate behaviours. Insurance is about individual's propensity towards risky behaviours. Men especially younger men are genetically predisposed to take risks behind wheel compared to women. This is acknowledged by the insurance industry, supported by mass collection of statistics. Consequently younger men tend to pay higher premiums. If we accept that behavioural characteristics in genders are irrelevant, then perhaps factors like locale, age, type of car, professions etc etc might also be construed as discriminatory...

TheDoctrineOfSnatch Mon 19-Nov-12 08:32:59

You believe that there are innate differences and genetic predispositions to take more risks for men. I disagree with you.

Whichever of us is correct, it can't be the fundamental plank of your argument. If insurance companies are allowed to use statistics to override the legal protections of equal rights acts with respect to protected characteristics (which are gender, sexuality, religion, race, disability) in one area such as gender, they should be allowed to use them on eg religion. If such statistics were collected for religion and they found a statistically significant difference between believers in Judaism and believers in Buddhism, would you support differential insurance pricing on those grounds?

caramelwaffle Mon 19-Nov-12 08:47:29

Bumping

Crappers Mon 19-Nov-12 15:15:56

I disagree with you per the points outlined in my earlier post (s) and I see little point in another repetition. Insurance premiums should be priced based on independent and correlated data and not based on equality laws. For example, should non smokers pay the same premiums as smokers even though latter had made a different lifestyle choices. Or a household be made to pay the same insurance premiums irregardless of the locale their property is in. I suspect not.

DilysPrice Mon 19-Nov-12 16:22:19

Nobody is arguing that (young) men aren't more expensive to insure than (young) women. Yes on average they are a worse risk. But we as a society have decided that there are certain protected characteristics which we should not be allowed to use as a basis for discrimination. If as a woman you want to have your increased likelihood to go on maternity leave disregarded at a job interview then you have to take the swings with the roundabouts.

TheDoctrineOfSnatch Mon 19-Nov-12 18:02:40

Exactly dilys.

Women are statistically much more likely than men to go part time after children are born,, but employers are no longer allowed to use arguments like this in employment decisions, although statistically they are perfectly valid. I simply don't see any difference between your "men are hard wired to take risks, statistically have more accidents and so should pay higher premiums" and an argument that says "women are hard wired to take on more childcare, statistically go part time more often and so should have poorer employment prospects.". If you see a difference, can you explain to me what it is?

Equality law is considered a higher principle than statistical difference and I think that is right.

OP, the other things you cite like profession and house location are not protected characteristics, therefore it is not illegal for insurance companies to use these in price setting. If the definition of protected characteristics expands to, say, economic background, these might become protected. As far as I know, there are no such plans for equality law.

DilysPrice Mon 19-Nov-12 18:22:00

As a tangential point, anyone with teenaged sons having trouble getting insurance at a price they can afford could go worse than suggest they get a Saturday job as a nail technician grin - I suspect that that sort of highly gendered job will start to attract a significant discount.

TheDoctrineOfSnatch Mon 19-Nov-12 18:36:56

Ooh dilys! Wouldn't student be main occupation though?

Agreeing to a black box which monitors speed and time of day of car use is a good way also, as the price can then be personalised to individual risky or less risky behaviour.

Crappers Tue 20-Nov-12 01:52:19

Hi I am not entirely sure if we are comparing like with like in terms of insurance premiums pricing and women having poorer prospects due to increased likelihood of going part time or maternity concerns...I am sorry but I still cannot or unable to see how they belong to the same argument. I see your point about protected characteristics...therefore, if insurance companies are not allowed to "differentiate" on factors like say age to work out the risk premiums, would you agree that an older experienced driver should pay the same premiums as a younger driver, since it would be age discriminatory to do so? Would factors like practice, experience, maturity not play a part in reducing the risk propensity. But this should be disallowed on the basis of discrimination since age is a protected characteristic.

Crappers Tue 20-Nov-12 01:55:08

And i too agree and support the idea of installing a black box!

TheDoctrineOfSnatch Tue 20-Nov-12 06:59:04

Hmm, I think the difference with age (experience) is that a person goes through different levels of age (experience) in their lives. So it's possible to pay someone with two years' experience at a job less than someone with five years' experience, even though there is a strong correlation of age with experience, because the person with two years' experience will have the chance to get to five years in due course. So I guess the same is true for insurance.

As I've said,I think that if one agrees protected characteristics trump any statistical differences in the area of employment, it's illogical to not let them trump in the areas of insurance and annuities. So in my view, I am comparing like with like.

DilysPrice Tue 20-Nov-12 07:40:35

Age is not a protected characteristic for the purpose of insurance.....it would utterly destroy life insurance if it were, so I don't think it's going to happen.

I was a student up until a few months ago - when I graduated and had to put down my (professional) job title, my premiums actually went up!

Crappers Tue 20-Nov-12 13:49:07

I thought age is one of the protected characteristics under the Equality Act. Therefore for the purpose of some insurance, some protected characteristics are included whereas others deemed acceptable to be excluded? I am not sure if I agree with this.... I feel it just complicates the already complex market and include an element of subjectivity. Who is to say which protected characteristics should be included and some excluded for the various types of insurances? Some dude sitting in their posh offices in Brussels perhaps?

Doctrine snatcy : thank you for the posts. I really enjoyed the debate and have learnt something new! ;)

msrisotto Tue 20-Nov-12 13:51:22

God i'm dreading this. Fantastic timing too just before Christmas.

DilysPrice Tue 20-Nov-12 14:39:33

If you restricted the ability to price on age then the entire life insurance market would collapse overnight - without a hint of exaggeration. You could, and maybe will keep the exemption for life/health, whilst removing it for motor (perhaps allowing insurers to use number of years licensed as a proxy) but it hasn't been done yet.

Essentially when the various discrimination laws were brought in, certain exemptions were made in the legislation - Bravissimo is allowed to hire all female bra fitters, non-profit Catholic schools are allowed to select Catholic pupils, and insurers were allowed to discriminate by age and sex. It's really quite straightforward. But like all UK laws they're open to challenge in the European courts, taking into account the practicalities of the changes versus general principles of equality.

In this case "I want to pay less because I have a vagina and statistically that's associated with less risky behaviour (though I personally may be Amy Winehouse)" is not a great argument.

msrisotto Tue 20-Nov-12 16:17:41

So statistical fact is unimportant? Really?

DilysPrice Tue 20-Nov-12 16:25:07

Who said it was unimportant?

msrisotto Tue 20-Nov-12 20:20:26

To the insurance companies, statistically being less risky is a big deal.

TheDoctrineOfSnatch Tue 20-Nov-12 21:41:37

To an employer, statistically being more likely to take maternity leave is a big deal.

DilysPrice Tue 20-Nov-12 21:57:56

Not to mention the fact that women as a class take significantly more sick leave in general. But that says nothing about me as an individual, I scarcely take any, and I'd be livid if I got marked down at interview for being a higher sick leave risk - even if that would be the best strategy for employers.

msrisotto Wed 21-Nov-12 08:12:22

I'm not sure you can compare employment rights with insurance.

HotheadPaisan Wed 21-Nov-12 08:21:36

Women have babies, it's the reality, we just shouldn't have to suffer financial losses because of this, it's the system that makes it all difficult, it could be changed to take account of this but it's not in some men's interests.

FlyOverTheMistletoe Wed 21-Nov-12 08:23:32

I can assure you all the insurance companies are using this as a way to make more money. No one's insurance will be coming down - which it would if this was not just a cynical ploy to make more money. angry

TheDoctrineOfSnatch Wed 21-Nov-12 08:28:55

Msrisotto, why not?

msrisotto Wed 21-Nov-12 08:57:45

As Hothead said, the fact that women have babies is a biological fact and necessary for the survival of the human race. It isn't really a choice to have children, otherwise we'd die out. It isn't fair to discriminate against women for doing what they have to do.

The fact that women drivers cost insurance companies less money and are less of a risk is nothing to do with biological imperative and it seems inherently unfair to effectively punish women for their good behaviour.

TheDoctrineOfSnatch Wed 21-Nov-12 09:31:08

Ok, what if the employment decision is to pay a white person less than an Asian person, because on a statistical basis, Asian people outperform white people on a set of aptitude tests? That would be discrimination.

If said employer got the individuals to sit aptitude tests and paid on the basis of individual outcome, that would not be discrimination.

Young women (and young men) are at liberty to take on a black box policy which will give them individualised pricing based on their actual driving. On this basis, it may well be that more young women than young men get cheaper policies, it might be that more Jewish people than Buddhists get cheaper policies, but that will be determined on a case by case basis.

msrisotto Wed 21-Nov-12 17:59:32

I don't mean to be snippy but I don't like dealing with 'what ifs' and I already said I don't think you can compare this to employment law.

TheDoctrineOfSnatch Wed 21-Nov-12 18:08:24

Fine, up to you. My second example was to move away from your mention of biological imperative re childbearing.

DilysPrice Wed 21-Nov-12 18:10:24

Why can't we compare this to employment law? Is it because equality is less important for supply of services than for employment? I agree that it's not as important but I do still think that equality laws should apply to supply of services - do you think that those particular laws should be dismantled mrsr?

The basic principle is that some people drive like twats. Some of the twats are women - rather more of them are men. From an insurer's point of view it makes sense to assume that every man is more twattish than every woman, but to my mind that's in fundamental conflict with my feminist principles, and I'm happy to see that assumption outlawed. I do not want to be getting a discount simply because I'm a lovely safe woman (even if I'm Amy Winehouse) and my DH is a nasty rough man.

TheDoctrineOfSnatch Wed 21-Nov-12 18:14:15

.,. I find what ifs helpful because sometimes I'm more aware of some forms of discrimination than others so either reversing the genders or substitutiing black & white or gay & straight for female & male can help me see it.

Off to the pub now, hooray!

msrisotto Wed 21-Nov-12 18:19:51

Taking that to its logical conclusion leads to radically reforming the way insurance companies calculate risk. It still wouldn't be fair to discriminate based on age even though we will all go through at least some age bands because that is still a sweeping judgement based on fact but a generalisation nonetheless. I as an individual was a careful driver at 17, could be more reckless now I'm older and arrogant wiser etc. also, it would be unfair to judge risk based on job because who is to say that doctors as a profession are less or more safe than teachers etc ad infinitum. And if I was a doctor, it doesn't mean that I conform to that stereotype or statistical calculation based on that group.

Am I making sense? I'm not trying to be anti equality because this one is going against women here, it just doesn't make sense to me to single this one thing out but not the other variables.

msrisotto Wed 21-Nov-12 18:20:36

My last post was in response to Dilly btw.

DilysPrice Wed 21-Nov-12 18:32:41

It's singled out because it's a protected characteristic, like race, religion and disability. Age is also (now) a protected characteristic but insurers are still exempt.

Profession, postcode and car choice are not something we as a society wish to protect - although if firms are blatantly using them as proxies for indirect illegal discrimination (eg "redlining") then they might be in trouble. If someone assumes that all solicitors are more cautious drivers than all actors then that's harsh on the really conscientious actors, but doesn't reflect widespread discrimination within society, so the law doesn't feel the need to intervene.

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