Wednesday, 6 July 2011

Safe drivers to be penalised by EU directive

The British government has confirmed that its interpretation (ie. gold plating) of an EU directive on gender bias in insurance will prevent insurance companies from taking gender into account when calculating insurance premiums.

Part of me says good because I'm a man and it irritates me that despite being only two years younger than my wife, both with a clean licence and no accidents in the last x number of years, I still have to pay more for my car insurance than she does and I've had a licence for longer.

But mostly I think this is a bloody stupid idea because insurance isn't based on gender, age, disability, race or any of the other -ists, it's based on risk.  Like it or not, statistically women are lower risk drivers than men.  Young drivers are high risk than older drivers and disabled people are also higher risk.  Premiums are therefore loaded according to the risk taken on by the insurance company - the less chance there is of them having to pay out on a claim for you, the cheaper your insurance and that's entirely fair even if it means that women get cheaper car insurance than men.

The cost to the insurance companies will be passed on to consumers.  The premiums for men won't come down (or at least not significantly), they will be increased for women and the insurance companies will simply make more money.  If they are forced to equalise prices for men and women then they will just load another category that it's not illegal to weight premiums on such as age or disability.  Until someone complains about age discrimination and then we'll all end up subsidising 17 year olds in Subaru Impreza's.