So the world didn't end, but did our premiums go up?

January 23rd, 2013 in Car Insurance Advice


 

December 21st came around and everyone waited with bated breath to see what would happen, and it had nothing to do with the Mayans. Instead, drivers were waiting for the EU Gender Directive and the abolition of gender as a factor when working out car insurance premiums. The true effects of the directive are yet to be felt, but how did our prices look in the months leading up to it? Every three months, Confused.com and Towers Watson team up to investigate our changing premiums and look for trends in our prices. All the figures quoted are averages for an annual comprehensive policy.

 

Gender neutral madness

 

First, I think some good news is in order. The national average car insurance premium stands at £737, a drop of £20 since the summer and £107 less than the same period in 2011. Not too shabby, but there is also a little bit of bad news for young female drivers. Even though you were still paying less than men for your car insurance (17-20 year old females paid £1,986 per year, just under £1000 less than males), you’re also the only ones to have been lumped with a price increase. Sure, it’s only 1.6% more than last year (working out at roughly £27 more than in 2011) but the prices for men of the same age have been slashed by a fifth, saving them just over £600 over last year. What madness is this?

 

These latest figures were taken in the last three months of 2012, so the directive would have only been active for a week or so. This means that these changes in price (in the case of the statistically more risky young male drivers, a dramatic decrease) are merely the calm before the storm. It will be interesting to see where we’re at once the Gender Directive has had chance to work its magic.

 

Regional oddities

 

Take a guess where young lady drivers have seen the biggest jump in their premium? If you guessed London, you’re close, but no cigar. As the capital, London understandably has some of the highest prices (£3,382, a 3.7% jump from last year), but they’re not the highest. That prize belongs to drivers who live in Northern Ireland, who are paying a whopping 12.7% more than last year, averaging £2,287. That’s about £250 more than last year, meaning that an 18 year old girl earning minimum wage in Northern Ireland (£4.98 an hour according to Gov.uk) will have to work an extra fifty hours in order to pay for the increase to her premium.

 

What can I do about it?

 

This might only be the beginning of a much larger increase, and the problem is that we don’t really know how things are going to pan out until they happen. Insurers are having to rethink the way they look at how risky a driver is since they can’t take gender into account, meaning that prices could be going all over the shop for the coming months. There are still a few things you can do to limit the impact of the Gender Directive that will (hopefully) bring your prices down a bit:

 

·         Downgrade your car. Smaller cars have smaller engines, and so generally have a lower rating when it comes to working out how risky you are. The average premium for a car with the lowest group rating e.g. a 1.0 litre 2011 Vauxhall Corsa  stands at £718.

·         Consider installing a telematics ‘black box’ device in your car. These track the way you drive and give an accurate readout of your driving ability, and so paints a much more accurate picture of your risk level than a general statistic. Some insurers will offer discounts for drivers with a good telematics score, meaning you get a much fairer price.

 

This article was written free of charge by Jamie Gibbs, who writes about all things motoring for women’s car insurance comparison site Confused.com