Sometimes It’s Hard To Be A Woman!
So sang Tammy Wynette in the first line of the 1968 hit single, “Stand By Your Man”. 44 years later and it’s still proving to be hard to be a woman, particularly a woman looking for car insurance.
Why? Well according to Tiger Watch – our very own monthly car insurance price monitor – women car insurance shoppers in April are seeing their premiums increase by a whopping 3.2% compared with prices recorded just a month ago. That’s almost three times the increase that male drivers are experiencing and equates to an eye-watering annualised inflation rate of some 38%! Ten times the current rate of RPI!
This begs the question as to what’s happening to suddenly make women much riskier insurance prospects than men. Well they’re not. In fact, women’s insurance prices – especially for young female drivers - have historically been cheaper than those of their male counterparts. And indeed they still are. This isn’t necessarily because women have fewer accidents than men. It’s just that the claims they make tend to be lower – perhaps indicating accidents at lower speeds.
So why are prices for women drivers starting to catch up with prices for men? What we could be seeing here is the impact of the (soon to be infamous) EU Gender Directive that comes into force on December 21st 2012. This will essentially stop insurers from using gender as specific risk factor in the pricing of policies. And the likeliest upshot of this is that prices for women drivers will increase disproportionately bring them broadly into line with male policy pricing.
This is likely to have the most marked effect on younger female drivers. Indeed when we look in more detail at the April Tiger Watch results, we see an incredible 9.9% month-on-month price increase for our 20 year-old women driver profile – almost 10 times the increase that we saw for 20 year-old male motorists. Absolute prices are still cheaper for women than men in this age group but they are equalising fast.
Is this fair? In our view, no! If, statistically, women drivers make lower claims on their insurers, then they deserve to have their policies priced accordingly. We will watch with interest how this pattern develops over the next few months. As Tammy said: “You’ll have bad times, And he’ll have good times, Doing things that you don’t understand”...