GUIDE: Women drivers and telematics Car insurance: Act now so safe women drivers stop subsidising bad male drivers – how and why.
In this guide: Women do drive better than men and a telematics app or black box can prove it. Telematics is opening the way for women to reduce their driving insurance costs today. With women only car insurance deals becoming more and more popular with companies like diamond car insurance women should know more and can with this car insurance for women review.
Telematics can also bring other big advantages. We explain why the current situation means good women drivers are subsidising the insurance premiums of bad male drivers – and this needs to stop. And we list as many reasons as we can find about why it makes sense for the good drivers to act now to realise the benefits of telematics insurance (black box insurance).
Nine months have passed since insurance companies were prohibited from automatically selling reduced insurance premiums to women. The affect of this prohibition has been to increase the driver insurance premiums paid by women. But there is a way of women rectifying this situation today – by the use of telematic devices.
This guide explains:
- How the original judicial ruling came about (and the important principles involved)
- Why this means that women (safer drivers) are now subsidising the insurance premiums of male (less safe drivers)
- How telematics can help women reduce their insurance premiums
- The general benefits deriving from the use of a telematics device.
I examine potential objections – and their possible and probable resolution.
Women are safer drivers than men
Of course they are – the point is so obvious it is not worth debating. If women were not safer drivers than men the insurance companies would never have adopted automatic women-only discounts in the first place.
Women tend to be well-positioned for good deals on car telematics insurance quotes. Actuarial tables imply that women are less likely than men to drive fast. They also own less-expensive cars that don’t cost as much to repair. Because they don’t drive as fast, any accidents they have cause less damage, meaning the insurance company usually pays less for a claim by a woman driver.
And if you want back up the argument with detailed proof go here to the statistical brain
However, now, because of the equal treatment ruling (which incidentally implies that discrimination by postcode is also unlawful) male and female driver policies are all calculated from the same common pool. That is why you can say that premiums for men have been artificially lowered because they are receiving a subsidy from the safer women drivers. Put another way, the safer women drivers are subsiding the insurance policies of riskier male drivers. Black box insurance can put an end to this.
Ten reasons for women drivers to adopt telematics insurance now
What is telematics – see the definitions here. A telematics device is either a bit of kit built into the car by the manufacturer, or added later by an insurance company, that constantly tracks and records aspects of how you drive, when you drive and where you go. Or, it can be an app sitting in a smart phone recording some of the same information. The use of these devices (and this technology) is rapidly expanding and will turn the world of vehicle insurance upside down.
Download this discussion as a pdf: Women equality and telematics note or, read on.
1: I’ve got a spy in my car constantly looking over my shoulder.
Yes – true. But at least you know you have a spy in the car. You have made a conscious decision. And you know what the spy is looking out for and you know what you are gaining from the bargain. This is unlike the unknown use of road-side cameras to record driver behaviour (speeding, road junctions, helicopter number-plate recognition and so on). And, of course, you will know that sooner or later everyone else (well, at least most women) will also be employing the electronic spy.
2: I’ll get reported to the police for speeding, jumping lights, other traffic offences.
No you will not. The relationship is between you (buying insurance) and the insurance company (selling the insurance) and no-one else. The policy sets out the type of bad driving the policy is prepared to tolerate – and, importantly, the driving it is not prepared to tolerate. The key is – you are expected to drive reasonably. And everyone knows what that word means – there is nothing tricky about it. However, this does not involve the police at all. No information about anything can be passed to anyone without your consent – or, in extreme and unusual cases – without a court order. However this is an area for discussion – as we point out here and here.
3: But I am a safe driver anyway.
So – no problem. Benefit by taking up a discounted telematics policy – or a policy at the same price but which includes some of the advantages of telematics (accident alert, vehicle theft protection).
4: My (male) partner has objections.
Well – discuss them and tease them out. Download this advice as a check list and go through it or show him this page and talk further (and with other drivers in your household).
5: Other people drive my car.
Not a problem – they would simply be added to the insurance in the usual way – and of course you would tell them about the fancy device installed in the vehicle – you obviously trust them to be a reasonable driver so all they have to do is to continue to drive in a reasonable way.
6: My teenager(s) drive(s) my car.
Young drivers are a key market for telematics insurance because device-fitted-cars qualify for young-driver discounts. Also: you can see where the car is, how its being driven. If you don’t like what you see you can talk to the driver and take the issues (whatever they are) further.
7: What happens if there is an accident (or I see an accident).
A device fitted to the car would automatically dial the emergency services and call for help. The device would give precise your precise location making assistance easier and quicker to provide. If you see an accident you can (with some devices) just press a button – this also automatically calls the emergency services giving the precise location of the accident. Again there is further discussion on a national scale needed – see here
8: What happens if the car is stolen?
The device will track your car and at all times reveal its location. In theory this should make it easy to recover any stolen vehicle and reveal the precise circumstances in which it was stolen.
9: It will take ages to set up – it’s a fad!
No – start now and no- it’s not a fad. Start driving immediately as though the device was fitted. But, also if you have a smart phone you can down-load an app for your phone (we are currently testing an app provided by Confused.com) which can assess your driving style and forecast what insurance company will provide what discount. And see our review of drive-like-a-woman. And its not a fad – the whole telematics world will receive a big boost soon when the EU legislates for all new cars to have the telematics eCall installed. (In fact, new cars all have some kind of on-board computer now anyway. It is not difficult for these to be added to so as to collect and transmit a quite extraordinary range of information.
10: So, what is the ‘green’ argument?
Driving within the reasonable constraints measured by the device and set by road-users means:
- less wear and tear on the vehicle (meaning the vehicle lasts longer)
- less stress on the driver and passengers
- less stress for other road users
- reduced risk of accidents (to vehicle occupants and other road users)
- quicker response to accidents (reduced likelihood of fatal or severe permanent disability, quicker warnings to vehicles approaching the accident site)
- less fuel consumed by the vehicle
- less polluting emissions from the vehicle
- better use of the existing road space (that is, more efficient use of the existing highway capacity)
- the use of aggregated data to investigate accidents/road usage/vehicle and driver behaviour.
How did the original equality insurance ruling come about?
So, here’s a bit here about equality and the law. So, back to Rome in November 4 1950. Just think for a moment – Europe is still covered in ruins. The full extent of the holocaust is yet to be revealed. Every European family has to greater or lesser extents suffered from the cataclysm. The European nations say with one voice – never again. The union of Europe shall be founded on: the principles of liberty, democracy, respect for human rights and fundamental freedoms and the rule of law.
So when the EU lawyers came to look at the insurance industries claim that it wanted to treat male and female drivers differently the judges had to go back to those words agreed back in 1950. They reasoned the principle of equal treatment requires that:
‘…that comparable situations must not be treated differently, and different situations must not be treated in the same way, unless such treatment is objectively justified.’
Here is the judgement – it’s a bit technical but the gist is easy to follow : The judgement
The essence of the thinking is that:
‘Direct discrimination occurs only when one person is treated less favourably, on grounds of sex, than another person in a comparable situation. Accordingly, for example, differences between men and women in the provision of healthcare services, which result from the physical differences between men and women, do not relate to comparable situations and therefore, do not constitute discrimination. ‘
And the court reminded the insurance companies they must not use this interpretation to reinstate different premiums for pregnant women:
‘In any event, costs related to pregnancy and maternity shall not result in differences in individuals’ premiums and benefits.’
So – the European court of justice ruled that the discrimination is unlawful. It had to rule in this way because otherwise a fundamental principle would have been breached – and it is all our interests it is not breached. The principle, for example, is important when women come to argue for equal pay for the same work. It’s also important to stop governments deciding that certain groups of people (Jews, Muslims, Travellers, Trade Unionists, dissidents generally or any group of people a government decides it doesn’t like) merit different treatment.
But, reporting and discussion of the issue in the UK is ill-informed
The insurance world knew this was coming – and have had some time to deal with it – but discussion of the need tfor us to think European in the UK is frowned upon and uptake of telematics policies has been slow – though is increasing.
However, the reporting of this issue in the UK has distorted the issue and its principles – and the country has been slow to adopt remedies – particularly the use of now common available technologies – so that insurance, instead of being based around actuarial tables in based on actual driver performance, is – to use the jargon – User Based Insurance (UBI in the trade).
The problems in thinking start at the very top – in the House of Commons – here for example is an exchange with the Prime Minister from April 2011:
Jonathan Evans (Cardiff North) (Con): The whole House will be aware that younger women drivers face a massive hike in their insurance premiums next year as a direct result of a European Court judgement. In that context, does my right hon. Friend share my disappointment that this judgement has been warmly welcomed by London’s Labour MEP Mary Honeyball, who has indicated that she considers it to be admirable and the price of equality?
The Prime Minister: Well, I have to say to my hon. Friend that that shows that some of the loony left is still alive and well in our country…Frankly, insurance premiums ought to reflect risk, and my hon. Friend is, as ever, displaying common sense, whereas the European Court did not…
Or this nonsense from the Daily Telegraph.
Or the commonly-heard objection from male drivers that ‘…the higher risk of accidents for men may not reflect their free choice to engage in riskier driving behaviour.’
Or, extraordinarily – the way young male drivers will rush to take up the fusty threadbare arguments of the ill-informed bore.
And finally, the wilful wrong-headedness of the UK’s insurers – this from Association of British Insurers acting Director General, Maggie Craig:
`This gender ban is disappointing news for UK consumers and something the UK insurance industry has fought against for the last decade’.
Why you should start now – because its coming
The public interest arguments for every vehicle carrying a telematics device are so strong it is only a matter of time before every vehcile will be carrying one — why not get in on the front row? Shortly the EC plans the role out of the European wide eCall system – this will act as a major push for telematics systems. Read what the EC says.
Why are you telling me all this now?
First – insurance companies will shortly be in a race to recruit the safer drivers to their telematics policies. For safer – read ‘female’. So, it’s possible you will find some good deals. They will also want to use the female family driver to draw in the rest of the family (spouse, partner, under-25 driver) thus recruiting to their books a household of lower risk policies.
Second – its early days, but telematics is the future and despite the conservative predictions of the insurers, the telematic device will turn the insurance market upside down – all polices will be telematically driven with only a minority of policies without. The push by the EU will only accelerate the process. See our reports from this year’s telematics insurance conference in Chicago.
Third – the green argument for telematics needs to be made stronger. The arguments for building ever-more expensive transport systems (road, rail, air) are unsustainable. While electronic controls come at a price they open a way for the better common use of existing systems rather than building more.
Four – to be clear, it is the way we earn our living. This site is one of the few telematics sites that is not pushing any one particular product. We think this new technology makes better use of our planet’s resources – the public generally have an interest in seeing it is applied in the general public interest and not exploited only commercially.
So whether it’s car insurance for women over 25 or car insurance for women over 60 you acn be sure to track down the cheapest insurance.
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