Recent research has shown that, despite taking gender into account when pricing policies being banned, men still pay, on average, over £100 more than women for their car insurance.
The research, conducted by fellow comparison site Confused.com, showed that by the end of last year, the average annual car insurance premium for a man costed £812, while the average for women was £101 lower at £711.
Until 2012, car insurance for males would be explicitly more expensive than for women, based on statistics that showed that men were far more likely to be involved in traffic accidents and collisions. However, in 2012, EU law forbade pricing based on gender. Following the introduction of the law, men still paid more than women on the whole, but the gap was much smaller than before (Confused.com estimated the difference between the average premiums for men and women in the year following the change to be at around £27).
The gap, however, has been widening steadily ever since. Insurers can no longer price policies directly based on the gender of the driver, but can use various other statistics that will tend to work in favour of women when it comes to pricing. For example, men tend to drive more miles in their car – this will make a policy cost more. Confused.com’s Amanda Stretton explained that insurers are getting ever “more astute” when it comes to identifying these kinds of statistical signs that point to higher risks for any kind of driver. As such the gender pay gap when it comes to car insurance is simply down to a comprehensive assessment of statistical likelihood.
The group with the most expensive car insurance is still, by far, younger drivers. According to the latest data, the average 17-year old driver will pay more than £2,100 for their annual premium, with the figure staying about £1,000 until the driver reaches the age of 27.
Overall, premiums nationwide rose by around 14% over the last year.
James Dalton at the Association of British Insurers explained that various factors, from the government’s hiking of Insurance Premium Tax, to the often cited large number of (often fraudulent) whiplash claims serve to push insurance costs up year on year. This means that the importance of shopping around for policies is ever growing.
Dalton said: “Motor insurance remains a highly competitive market, with motorists shopping around for the best deals. But pressure is growing on premiums.
“Cold callers and ambulance-chasing lawyers are still finding ways to exploit the system, with government data suggesting a 5% increase in whiplash style claims. This is driving up costs for honest motorists.
“In addition, the government has doubled Insurance Premium Tax in just over a year, and repair bills are going up as cars get more sophisticated. So while insurers are doing all they can to control costs, these pressures show how important it is that the government’s latest proposals to tackle low value whiplash style claims are implemented fully and as quickly as possible, and that there is no rise in Insurance Premium Tax.”