Women across Ireland could be facing as much as a 25% increase in their car insurance next year, thanks to an EU court ruling. The increase follows a decision by the European Court of Justice (ECJ) that men can no longer be charged more for their policies than women, even though statistically they are more likely to be involved in serious incidents on the road. The ruling which will take effect on 21 December 2012 means that gender can no longer be used as a risk factor when setting premiums for car insurance. This directive is a result of a case brought to the ECJ in March 2011 by Belgian consumer group Test- Achat which argued that taking gender as a risk factor in insurance breaches EU rules on gender equality.

The directive means that insurance companies will be forced to offer unisex premiums. Unfortunately insurers are most likely to increase insurance rates for women in order to bring them in line with premiums for men. Bringing insurance premiums to meet in the middle, while benefiting a lot of male motorists could still result in a 25% increase in rates for female drivers. This will have a particularly adverse effect on younger drivers under the age of 25, with women in this category possibly paying as much as €1,000 extra in insurance per year. According to the 2011 survey by the Central Bank of Ireland, women aged between 17-20 paid on average €1,000 for their premiums while men in the same category paid €1,700. The average insurance premium for women aged 21-24 totaled €650 while the total for men was €1,100. However, these figures are averages so in reality many people already pay much more than this for their premiums depending on their driving experience and the make of their car. A 17-year old male driving a 1.4 litre hatchback costing €2,500 could pay €2,100 annually in comprehensive car insurance, while an 18-year old woman pays €1,300.

Gender is not the only risk factor used to calculate insurance premiums. Factors such as driving experience, occupation, address and the make and model of the car are also taken into account. However, gender seems to be the most significant factor when it comes to serious incidents on Irish roads. The RSA has conducted several surveys on road deaths in Ireland and compiled a Road Collision Fact Book in 2009. It found in that year “among all car drivers, 17-24 year old male drivers were 7 times more likely to be killed on the road”. In another survey in 2003 on alcohol-related crashes , the RSA found that men between the ages of 19-24 and 30-34 were most at risk of drinking and driving and being killed. These statistics pose a problem to insurers setting premiums for young male drivers as they want to ensure they cover the cost of any claims.

While the court ruling spells bad news for female drivers in general there are some factors which could help to lower the cost of insurance in some cases. If insurers are forced to offer drivers at least one black box product it would allow motorists to prove how safe they are by recording how they drive. More careful drivers and those who avoid driving at night could benefit from cheaper premiums. This would result in a fairer method of calculating car insurance premiums for both men and women of all age groups, ensuring that safer drivers are not penalised along with those who pose a greater risk on the roads. Although most women drivers would still face a significant hike in their car insurance rates, proving themselves to be safe on the road could reduce the percentage of this increase. However, it remains to be seen if insurance companies will offer this option to drivers when renewing their policies.

Other mitigating factors include location and the make and model of the car being driven. Drivers with more secure parking arrangements such as a lockable garage could have an advantage over those relying on on-street parking. This would be particularly relevant in areas with high crime rates where the posed risk of damage to vehicles is potentially higher. The reliability of the car is also important. Depending on the engine size and performance of the car in question insurance rates can vary. For example, a car with an engine capacity of 1251-1500, valued at €19,635 could cost the owner €959 in insurance per year. The less likely a car is to break down and incur repair costs, the lower the insurance rate. However, these factors are currently taken into consideration when calculating insurance premiums for drivers so the likelihood of them having a significant impact on lowering the cost to women in particular is slim. Rather, when looking for car insurance quotes, the elimination of gender as a risk factor increases the importance of these mitigating factors, along with driving experience and a clean licence.

The onus is now on women drivers to find different ways of proving they are safe on the roads but currently not enough insurance companies offer the black box technology which would enable them to do this and therefore avail of lower insurance premiums. This makes possession of a clean driving license and regular maintenance of their vehicles essential towards helping to lower the insurance rates faced by women drivers.