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Europe to ban gender discrimination in car insurance

Bennett Voyles

Until now, as is the case for many in the United States, European men have paid higher premiums on average than women for their car insurance. But car insurance premiums soon must be gender-neutral in the European Union – good news for men, but perhaps not such good news for women.

In March 2012, the European Court of Justice sided with a Belgian consumer group that had argued insurance couldn’t be an exception under a general EU ban on sex discrimination. Belgian rules previously declared that price differences between the sexes were legal if the differences were based on relevant, accurate data supporting the fact that women are better drivers than men.

To comply with the decision, the European Union has decided that car insurance companies will be prohibited effective Dec. 21, 2012, from using gender as a factor in issuing policies.

One British insurance shopping site,, notes that car insurance quotes for men and women are already starting to converge. Generally, rates are dropping all over Great Britain because of price competition, but they are dropping more quickly for men. However, “at the youngest end of the market, the male premium is still much higher,” says Andrew Goulborn, commercial director of

Before the ruling, women generally enjoyed a 12 percent price advantage over men. By September 2012, found that the advantage was less than 2 percent.

Several U.S. states, including Massachusetts and North Carolina, have had gender-neutral insurance rules in place for several years.

Price change?

British insurance groups had long argued that a ban on allowing insurers to charge men more simply reflected the reality of the underlying risks, and that a ban would lead to unfairly high premiums for women.

Statistically, men are much more dangerous behind the wheel. In the U.S., for example, the driver in a deadly car crash is three times more likely to be a man than a woman, according to federal statistics.

In a September 2012 news release, the Association of British Insurance expressed displeasure over the ruling.

“UK insurers fought for nearly a decade to keep the right to offer customers premiums that reflect their risk as accurately as possible, by using gender,” the association says. “Unfortunately, insurers lost this battle and were disappointed, but are now focused on adjusting their systems and working to make sure the change is as smooth as possible for customers.”

The Association of British Insurance speculated that women were likely to see their car insurance premiums rise.

However, one British insurance company that markets primarily to women, Sheila’s Wheels (its website is splashed with Barbie pink and all policies include coverage for handbags), says it expects its customers to retain a price advantage because so many of them are good drivers.

“Our claims costs should continue to be relatively lower due to the sheer number of good, safe drivers who comprise our mainly female policyholder base today,” says Jacky Brown, head of projects at Sheilas’ Wheels.

Richard Booth, a professor of law at the Villanova University School of Law in Pennsylvania, who has written about the EU decision, says the use of other risk factors in setting rates will keep men’s policies from getting much cheaper than women’s in Europe. “I doubt it’s going to have that much of an impact in terms of auto insurance,” he says.

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