Motor Insurance in 2013After a new European Court of Justice ruling relating to gender, there are going to be major changes in motor insurance for the upcoming year. The new ruling involves the way that insurance companies now price insurance policies.
Young drivers will be those principally affected, but they are not the only ones. Anyone who drives for a living, or a business which has drivers, could find themselves out of pocket. The ruling may seem relatively simple, but the consequences are quite far-reaching, even affecting things like taxi insurance.
While more business-related policies, such as motor trade insurance, won't be affected, domestic and driver-based policies will be significantly altered. This guide has been written to inform you of these changes and what they could mean for you.
New gender rules
The European Court of Justice has just ruled that, as of the 21 December, insurance companies will no longer be able to take an applicant's gender into consideration.
Usually, when you buy insurance, the company takes a wide range of factors into consideration, like your age, gender, medical history and even the type of car you drive. This is for a number of reasons.
For instance, research shows that young male drivers are ten times more likely to get involved with a motor accident than young female drivers are. Therefore the prices for insurance are calculated differently. You did end up paying less if you're a female driver.
But not anymore.
What will this change mean for you?
If you're a female driver, this means you're going to have to pay more than usual for car insurance, essentially the same price as male drivers. Insurance companies won't even be able to charge you less because you're less likely to kill someone in an accident.
Analysis shows that it is younger women, between the ages of 17 to 22, who will end up having to pay the most, up to 25% more, which is around £300.
Rural areas will be hit
Last year, it was predicted that motor insurance would increase sharply, by almost 50% for young drivers, over 2012 and 2013.
This may affect decisions by young people who are thinking of purchasing a vehicle for city areas; however, with the availability of public transport, this shouldn't be too much of a problem.
However, those in rural areas would be affected quite badly. Public transport links aren't as good as those in the city, which is why young people have a greater need for their own transport out there.
However, with the changes being made to the law, and typical premiums rising to over £3,600, young people in suburban and rural areas are going to find it quite difficult to drive to work.
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