Young women drivers buying car insurance and any man considering retirement will get a worse deal from the end of next year, following a ruling prohibiting the use of gender in insurance underwriting.
Insurers have until now charged young men significantly more to reflect the fact they are more likely to have serious accidents: a male driver under 21 is twice as likely to have an accident than a woman under 21. But the insurance industry will now have to rip up its current pricing model, and young men under the age of 25 are now likely to see premiums decrease by an average of 10%, and in some cases 25%
At the same time, car insurance premiums for women under the age of 25 are expected to rise by an average of 25% by the end of 2012, but by up to 60% for the youngest drivers, which could translate into an extra £500-£1,000 a year for some.
But Martin Lewis, creator of MoneySavingExpert.com, believes banning the use of gender for car insurance is sensible: "With car insurance I think there is some logic to this ban – gender price differences are based on behaviour. Why should one man pay more because others behaved badly? Would we allow the same to happen based on racial differences?
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