Premium hike could reduce number of female drivers
San Francisco, CA -- (SBWIRE) -- 12/03/2012 -- A new European law will go into effect that could effectively reduce the number of female drivers on the road because insurance companies will no longer be able to determine rates based on the sex of the policy holder.
The law, known as the EU Gender Directive, goes into effect on December 21 and could substantially raise auto insurance rates for female driver's. The rise may be so much so that many may be forced to stop driving.
Statistically, women drivers are safer than men behind the wheel, and usually pay a lower insurance premium than men. However, with the new law going into effect, the majority of female drivers will see an increase of as much as £300, according to data obtained from the insurance comparison website Gocompare.com. For new female driver's who just received their driver's licenses, the rate increase could be much higher.
A study conducted by uSwitch.com determined that about 13% of the women they questioned would no longer be able to afford automobile insurance, while 10% stated that they would likely end up selling their vehicles.
uSwitch's Michael Ossei, a personal finance expert, noted that "while millions of male drivers will be celebrating cheaper premiums, female drivers need to brace themselves for significant price rises”.
"It's more important than ever that they shop around to find the best deal at renewal time," Ossei said. "With more than 100 providers on the market, there is a big difference between the cheapest and dearest quotes. A little bit of research will go a long way towards limiting the financial impact of this judgment."
Cancelling your current insurance premium when the law goes into effect will not likely save you any money, says Clare Francis, a consumer finance expert with MoneySupermarket.com. According to Francis, many insurance carriers charge hefty fees to customers who cancel their policies.
Some insurance companies are being proactive to save their female customers money. Last week, the Co-operative said that the discount for safe drivers who renew or take out a Young Driver policy would double to 20% after December 21 to help offset any price increases.
Auto insurance is not the only type of policy affected. Life insurance and annuities are expected to increase, including a contract that your insurance company to pay you a regular income for life in return for the money in your pension fund.
Similar to auto insurance, women have traditionally paid less for life insurance because they live longer, leading to fewer overall claims. Men traditionally receive rates on annuities due to their shorter life expectancy.
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