Is the Women's Insurance Price Difference a Last-Season Fashion?
Is the Women's Insurance Price Difference a Last-Season Fashion
?
It has long been accepted that while the differences between the abilities of men and women may be far less than was once thought, there are still some areas where the guys and the gals are simply streets apart. One of these was in insurance quotes and prices - it has long been accepted that women pay less for car insurance and life insurance, and men pay less for income protection insurance, simply because of the varying risk profiles per gender. However, this may all be set to change ...
Why Do Insurance Premium Differences Exist?
The base reason that some types of insurance are more expensive depending on your gender, is that there is greater risk of some things happening to one sex than to the other. For example:
Men are more likely to cause and be involved in car accidents, and men's car accidents are generally more serious than women's
Men are more likely to die before age 50
Women are more likely to be ill or injured and unable to work, and often need more time off work when they do become ill or are injured
So, in order to create 'fairer' premiums for each gender, insurers put premiums up for those who are more likely to make claims.
Why Is This All Changing?
In Australia nothing is changing at the moment - however the European Court recently ruled that it amounted to gender discrimination to offer different car insurance rates for men and women. Other insurance types haven't been affected yet, but this sets quite a solid precedent for other insurance types to be equalized across genders.
What Does This Mean?
We are not really sure yet! It is a step in the direction of having insurance rates equalized for different genders across all different types of policies, however it is also not in Australia.
European insurers are saying that the move will force cost hikes across the board ... presumably that comment means that men, whose average risk will be lowered with insurers in Europe, will actually be paying more for insurance as well! However, it seems sensible that competition will eventually equalize the market anyway, after an initial adjustment period.
Will Life Insurance Prices and Income Protection Insurance Prices Change?
The insurance industry is surprisingly global, with larger companies often underwriting smaller ones. However, this decision affects only auto insurance, so it is unlikely that life insurance or income protection insurance prices will change in response.
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