Insurance companies will no longer be able to take a person’s gender into account when calculating costs and payouts, after a landmark vote in the European Court of Justice.
Companies will have nearly two years in order to get their houses in order, with the court specifying December 21st 2012 as the date in which the law will come into effect.
A court statement read: “Taking the gender of the insured individual into account as a risk factor in insurance contracts constitutes discrimination.”
The ruling has particular implications for car insurance, particularly for that of younger drivers. Until now, insurers had been allowed to take into account statistics which proved that young males were more of a liability on the road than their female counterparts.
According to the Office of National Statistics, 1,815 male drivers aged between 17 and 24 were killed or seriously injured in 2007, compared with 665 female drivers in the same age group. Last week, head of motor at Gocompare.com Scott Kelly reflected the general mood of scepticism in the insurance industry, saying “Ignoring (gender) seems to go against common sense.”
Meanwhile, Simon Douglas of AA Insurance has suggested that the ruling will add as much as £400 to the to the annual cost of car insurance for women under 30. The court was ruling on a judgement by Belgian consumer group Test-Achats, along with two other individuals.