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Top Fuel points leader Melanie Troxel stands next to her car AP Photo/Topeka Capital-Journal, Mike Burley
Women drivers

Era of cheaper insurance for women comes to an end

The European Court of Justice has ruled in favour of a Belgian challenge to the practice of giving young women a discount on their car insurance.

THE EUROPEAN COURT of Justice has ruled that insurance companies can no longer take gender into account when calculating insurance premiums, heralding an end to the era of cheaper car insurance for women.

The case was brought by the Belgian consumers’ association, which challenged the use of statistics based on gender.

Reuters reports that the ECJ this morning ruled in favour of the Belgian claim that the practice of allowing insurers to use sex as a determining risk factor, which has been specifically permitted since 2004 under the EU’s equal treatment rules, was discriminatory.

“Taking the gender of the insured individual into account as a risk factor in insurance contracts constitutes discrimination,” the court said in a statement.

The ECJ’s decision has major implications for the insurance sector.

In the first place, it is likely to increase the cost of car insurance for women. However, since it also applies to the payouts from annuities and retirement savings, it may boost their income in retirement – and make men worse off.

The new rule will come into effect on 21 December, 2012, to give member state the opportunity to decide what stance to take on domestic laws.

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