Female Car Insurance Guide

Over the years, women have put up with sarcastic comments from men about the supposed inferiority of female drivers, protected by the knowledge that their driving awarded them lower premiums than their husbands or male friends. For many years, car insurance companies rewarded women for their safer track record on the roads, while young men put up with rocketing insurance costs. Now, thanks to an EU ruling that places gender-based pricing on insurance in the same category as other forms of unfair discrimination, women could find themselves with a significant increase in their insurance premiums. It remains to be seen whether female car insurance is cheaper than male insurance. Having said that you will want cheap car insurance but also the best female insurance.

[pullquote align=”left”]men of all ages account for 92% of UK driving convictions and 98% of all convictions for dangerous driving[/pullquote]Luckily, there are new ideas in the works that could allow female drivers to continue to be rewarded for their caution and reduced speeds despite the legal changes. The insurance industry recognises that women, even those under the age of 25, are still statistically safer drivers than men, and seems to be looking for ways around the ruling. Telematics, a relatively new insurance system that’s rapidly on the rise, could be a solution for many women still hoping to cut costs on their insurance. In order to receive the benefits from insurers that they previously enjoyed, women will now have to prove themselves on the road, or find alternative ways of bringing down their insurance premiums and renewal costs that don’t involve gender.

Are women better drivers than men?

When you look at the numbers on paper, it’s clear that young female drivers are far less likely to make claims on their car insurance than a male driver of the same age. A recent study that examined 19,000 drivers over a 4-year period, spanning over 40 million journeys and 154 million miles of travel, concluded that women were indeed safer drivers on the road than men. Young men are 10 times more likely to be killed or injured in a road accident when compared to a driver over the age of 35, a statistic that doesn’t apply to their female peers. They are also generally more likely to cause trouble on the roads: men of all ages account for 92% of UK driving convictions and 98% of all convictions for dangerous driving; some pretty damning figures all in all.

[pullquote align=”right”]Now that gender can no longer play a role in the assessment of insurance premiums, age is a far more important factor[/pullquote]It’s unsurprising, then, that insurance claims by men add up a lot quicker than by women. Typically, a young man claims up to around £4,500, leaving male drivers paying a great deal more on their insurance premiums as a result. The AA have stated that, prior to the EU gender directive, a typical man aged between 17 and 22 was paying an insurance premium above £3,000 on his car, while young women paid around £2,215. This went down to £1,840 for males between 23 and 29, and £1,200 for women. This gap in costs of insurance between the genders continued on until the age of 40, when things balanced out a bit, with both men and women paying around £700-£750 on their insurance.

What these figures show, aside from the obvious discrepancy between men and women, is that younger drivers are always considered to be high-risk, regardless of gender. All young people are more likely to be in an accident or make an insurance claim, and although young drivers only account for 12% of those on the road, they are involved in over 25% of fatal accidents, making the danger levels at play far more serious than older, more experienced motorists.

Now that gender can no longer play a role in the assessment of insurance premiums, age is a far more important factor, meaning young women drivers will be placed in the same category of risk as their male counterparts.

The EU Gender Directive

Despite a long, hard battle from the Association of British Insurers, the European Court of Justice ruled in March, 2011 that including gender in an assessment of insurance premiums is unlawful, and goes against the principle of total equality under the law. According to the Court of Justice, by discriminating in favour of women on this matter, the fundamentals of gender equality are undermined, making arguments for important matters like equal pay less convincing.

[pullquote align=”left”]the AA Insurance Premium Index showed in the first two months of the Gender Directive 17 to 18 year old female drivers saw premiums increased by 42%[/pullquote]The ABI hoped to exclude insurance companies from this ruling, known as the EU Gender Directive, but EU gave the insurers until 21st December to change their rates accordingly. The ruling was fairly controversial, with many believing that women should be rewarded for more careful driving habits, rather than being penalised in the name of political correctness. Ian Crowder from the AA Insurance argued that “the ruling abandoned fairness in favour of equality. We were one of the voices saying it shouldn’t happen, but it has, the ECJ has ruled, and that’s now the end of the debate.”

So what impact has the Gender Directive have on women drivers? Gocompare.com predicted a premium rise at around £300 for most female drivers, with younger women being hit hardest with costs rising up to £2,000. Young men, on the other hand, will benefit from the ruling, and could expect to see decreases of around 10% in their premiums. The ABI had more modest predictions, pointing toward a 25% increase for women. Early indications point to the ABI’s figure being on the low side: the AA Insurance Premium Index showed in the first two months of the Gender Directive 17 to 18 year old female drivers saw premiums increased by 42%.

The Gender Directive doesn’t only effect car insurance rates, but all insurance products, making it illegal to discriminate against either sex when setting the costs of life insurance and pensions. Like the adjustments to car insurance premiums, the changes to life insurance will also have a negative impact on women, as in the past they tended to pay less on premiums due to a longer life expectancy. Thankfully, it’s not entirely bleak for female consumers; there is at least some reprieve when it comes to pensions. In the past, due to generally living longer, women received lower pension annuities, but thanks to this new ruling they should begin to receive higher pensions than before. All in all, the Gender Directive offers a mixed result for women in the EU, but certainly will cause a steep price hike when it comes to their car insurance.

 Can telematics help female drivers?

Since the EU Gender Directive increased the costs of car insurance for women, sales of telematics devices have taken a huge leap. It seems that many women are turning to these devices and policies to save money.

A telematics device can either be built into a car by its manufacturer, or put into your car by an insurance company. The telematics tracker is installed, which then tracks and collects data about the way you drive. This includes the amount of time you spend driving, when you drive, where the car is kept overnight, where you go and how well you’re driving. The data recorded varies according to different insurers, but it aims to provide a clear picture of the driver’s habits, which then contributes toward an assessment of how much the driver should pay for their insurance. The safer and more cautious the driver, the cheaper the insurance, while more dangerous practices can lead to raised premiums. These “pay as you drive” insurance policies can sometimes start out fairly pricy, but as you prove yourself to be a safe driver, they go down in cost. There’s also a chance to get premium refunds as a reward for good driving habits. Other policies start low, but quickly increase premiums for less than perfect drivers.

[pullquote align=”right”]with telematics as you prove yourself to be a safe driver, your premiums go down in cost[/pullquote]Some argue that telematics insurance policies are the future of car insurance, and predict that the majority of insurers will turn to this option at some point, with only a minority retaining their traditional practices. They believe that the EU directive will cause a rapid acceleration of this inevitable process. Companies like Aviva have picked up on this development, and have created smartphone apps to support telematics, like “RateMyDrive.” This app monitors braking, acceleration, cornering, the car’s location and the distance travelled. Using this data, Aviva will then offer their safest drivers major discounts on their insurance premiums, some as high as 20%.

Women can certainly benefit from telematics insurance policies. Studies have shown that women are less likely to drive as fast as men, something telematics trackers pick up on quickly. Slower driving also makes for less catastrophic accidents when they do occur, so the insurance company can expect to pay out less on claims made by women. While a young man might use a telematics app or tracker and find himself proven to be as risky a driver as the insurer expected, a young woman could use the system to her advantage and save a substantial sum of money.

As women have been proven, statistically, to be safer drivers overall, it makes sense that many would jump at the chance to prove themselves and get hold of cheaper insurance premiums. One of the UK’s leading car insurance sites, Tiger.co.uk, reported a 43% jump in sales of telematics devices just to women in the first quarter of 2013, when compared to the same quarter in the previous year. This leap was 4 times as high as the growth in the market for male drivers. The telematics insurance companies have spotted the potential in this situation, and many have begun to market themselves with a particular focus on women, playing on the idea of “driving like a girl” to appeal to female drivers.

Its hard to say whether telematics is really the future of car insurance as it’s still in its very early days, but if women continue to realise the prospective savings they could accrue from switching to this type of insurance, it certainly could live up to its potential.

Reducing insurance costs

Telematics policies aren’t the only way that women can bring down the cost of their premiums. Although gender alone will no longer save women money, there are plenty of other factors taken into consideration by insurers when setting costs. As a woman, you can reduce your premiums by taking all these factors into consideration, and ensuring that you’re presenting yourself in the best possible light to the insurer.

The details of the car that you drive are highly important to insurers. The bigger the engine of your vehicle, the more you can expect to pay, so if you’re worried about the cost of your insurance premiums then keep this in mind when selecting your car. The car’s specifications and any modifications that have been made to it are also taken into account. If your car parts and repair costs would be particularly high or low, this will also come into play when your car is being assessed, which is why more expensive manufacturers often fetch pricier policy rates. Your car would be placed into one of 50 insurance categories, which is then used to calculate your costs, with cars in higher groups fetching more expensive policies.

A more expensive car may also make it more attractive to thieves, a red flag for insurers, who are on the lookout for any elements that may increase the likelihood of a claim. Where you live is taken into account in this case too, with certain areas being more likely to be hit by thieves than others. To combat your premium potentially being increased due to these factors, it may be wise to invest in additional security measures such as devices for your car. By parking your car somewhere more secure than the roadside, especially in a locked, secure garage, you can reassure insurers and reduce the cost of your policy.

Aside from telematics systems, you can also prove your skill on the road by enhancing your driving education. Although it’s not strictly necessary, the Pass Plus course offers young drivers, or drivers of any age who are interested in improving their driving, a boost to their standard driving test pass. Taught by a registered approved driving instructor, the scheme takes a minimum of 6 hours and promises to improve road skills. Many insurers recognise Pass Plus holders as being stronger, safer drivers, and discount their premiums accordingly.

All in all, the easiest way to bring your insurance costs down is to build up your no claims discount, which will lead to substantial savings when it comes to the cost of your renewal. Safe, cautious driving and careful security measures will help you get there, all of which, if you’re a female driver, and especially if you’re over the age of 25, you probably practice anyway.

When the time comes to look at renewals, its wise to look around to find the policy that best suits your needs and budget, rather than just going for the first offer made by your insurer. Price comparison websites can be especially helpful with this, and some careful research can really pay off.

While all these tips can help you reduce your costs, most of them have only a relatively small impact in comparison with the savings from proving your driving skills using telematics insurance policies. So if you know you’re a competent driver and want to lower your premiums, you need to get a ‘black box’ installed in your car by the insurer of your choice. When you are making the choice be sure to choose the best female insurance which may not necessarily  inexpensive auto insurance or cheap car insurance.

See our article here on Telematics for Women.

    Robert Prime

    Robert Prime launched telematics.com in early 2013 and has over 10 years experience in the financial sector. He specialises in business startups and online marketing with a passion for new technology.

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