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Gender gap opens over car cover costs

Woman taking drive with boyfriendFigures published this week show a new gender divide has opened up over car insurance prices.

Young women have been hit with huge rises in the cost of motor cover this year.

At the same time, premiums for men aged between 17 and 20 have fallen dramatically.

The latest Watson Car Insurance Price Index shows that women in this age group are now paying 9 per cent more than this time last year.

Men, on the other hand, have benefitted from price falls of almost 30 per cent.

Effects of law change

These contrasting fortunes have been blamed on a new law which has made it illegal for insurers to charge men and women different rates based solely on their gender.

Since last December, when the European Gender Directive legislation came into effect, insurers have been effectively equalising the premiums they charge to male and female motorists.

Until then, men – especially those under the age of 25 – had faced much higher insurance costs than women, as insurers’ own figures tended to show they had a much greater risk of being involved in accidents and making claims.

Ignoring the risks

But providers can no longer use this statistical evidence when setting premiums.

Instead, men’s and women’s insurance prices are being brought into line with each other, with the result that men benefit from falling costs while women face significantly higher premiums than before.

Across all age groups, the research found, premiums have fallen sharply over the past two years.

From a high of £858 in the middle of 2011, today’s typical annual premium is £652, a fall of almost a quarter.

Good news ‘not felt by all’

Gemma Stanbury, head of car insurance at, said: "It’s great news for most motorists as their average premium is now £206 cheaper than it was two years ago.

"However, this good news isn’t felt by all as the most recent results from the Car Insurance Index reveal that women have experienced the greatest increases to their car insurance premiums.

"As a result, women aged between 17 and 20 are now facing average prices of £1,862 for their car insurance.

Prices levelling out

"At the opposite end of the spectrum, their male counterparts are enjoying huge price decreases of 29.2 per cent as the industry attempts to level out car insurance prices."

The price falls for men mean their annual premiums have fallen from an average of £3,314 in 2012 to £2,345.

Young women have fared worse in some parts of the UK than others, the figures show.

Gender differences disappearing

Under-21s in Northern Ireland will now pay an average of £2,156 a year, up almost 15 per cent on a year ago, for example.

Across all age groups, the gender gap in motor premiums has almost vanished.

The average annual male premium is now £665, compared with £635 for women.

This £30 difference is dramatically less than the £112 gap recorded this time last year, when the typical male and female premiums were £807 and £695 respectively.

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Chris Torney

Chris Torney

Chris is the former personal finance editor at the Daily Express. He's been a journalist for more than 10 years and contributes to a wide range of finance and business titles.Read more from Chris

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