One of the most obvious changes will be that women will no longer pay lower car insurance premiums than men.
Most commentators believe that men’s premiums will not fall by as much as women’s will rise. The British Insurance Brokers’ Association (BIBA) estimates that the ruling will mean women will typically pay up to 25% more for their cover. For some women it will be more than 50%.
Graeme Trudgill, head of corporate affairs at BIBA, said this will prevent insurers from discounting statistically safer drivers.
“Male drivers under 21 are twice as likely to have an accident than a female under 21. The industry will have to change its model and effectively females will now pay a cross subsidy for males on their insurance premiums.”
The AA has also described the outcome as unfair.
Roads around the ruling?
Some commentators have suggested that insurers will find ways around the ruling. For example, it could start offering discounts for job titles that are generally more popular with women, such as primary school teachers and nurses.
Many commentators are concerned that today’s ruling will force car insurance prices even higher – potentially forcing some motorists off the road entirely.
Although men pay an average of 30% more than women, premiums for female drivers have been rising at a faster rate. Over the last year, premiums for women aged between 17 and 25 have risen by 34% - an average of 70p a day!
Men in the same age group have seen premiums rise by an average of 12%.
Julie Owens, insurance expert at moneysupermarket.com, says: “Although the ruling doesn’t come into force until December 2012, it is likely we will see a convergence in pricing over the next 18 months.
“If your car insurance is due for renewal in the next couple of months then you should shop around and buy your new cover as soon as possible. On average, using moneysupermarket.com can save you £280 on your car insurance policy, which is a significant saving at a time when the cost of motoring is becoming more expensive.”
It’s not just women who could lose out
However, there are also wider implications.
Take, for example, the cost of annuities. Currently, if a man and woman have the same pension pot with which to buy an annuity, the man will receive a larger income for his cash. That’s because he is statistically less likely to live as long as women.
However, today’s ruling will prevent companies awarding men a higher annuity based on the statistical evidence that they will die younger.
Is this fair?
Opinion is massively divided over whether or not this outcome is fair. The recent moneysupermarket.com article ‘Is car insurance sexist’ sparked a huge debate in our community forum, with many people disputing whether women were in fact less likely to claim than men.
However, a moneysupermarket.com poll found that 62% of respondents believed the current discrimination is unfair and that all motorists should be judged on their driving record.
Today’s decision is unlikely to put an end to the debate.