Today the world of car insurance changed forever as the European Court of Justice (ECJ) ruled that insurance companies can no longer discriminate by gender. The ruling means that insurance companies can’t give lower quotes to women than men, even though it is widely believed that women are seen as a lower risk on the road and less likely to claim.

The main impact this will have is on insurance rates for individuals with men on the whole expected to see a 10% drop in insurance prices whilst women will see a massive 25% rise as both genders are given the same level of quotes. However, these statistics are just based on insurance companies not using gender to determine insurance rates, but there may be an even bigger impact than this if insurance companies start to look at new criteria for assessing insurance premiums to replace gender.

Criteria for Insurance Premiums
With gender now banned as a risk assessment factor for insurance rates, the logical conclusion is that more focus will be placed on criteria such as age, years driving and type of car when assessing insurance premiums. However, all of these factors are quite narrow and place many people under the same umbrella.

For example, all drivers under 25 will be quoted a higher premium as they are young, but not all young people are equally likely to claim. Gender was an extra determining factor for young drivers but without the use of gender how else will insurance companies separate young people and risk asses them?

Without being able to use gender as criteria, insurance companies may start to look at other factors such as:

Education level – When assessing young people, insurers may start to look at how well they are educated. The logic may be that someone with 3 A Levels and a Degree is less likely to be a risk on the road than someone who left school at 16.

Parent’s records – Insurance companies could ask for the claims records of a young person’s parents to see how good or bad their record is. If a young person’s parents are a high risk with multiple claims and points it could be more likely that they will also be high risk.

Driving test attempts – Insurance companies could also look at how many times someone needed to take their driving test before passing. It could be said that someone who passes the first time is a more competent driver and less of an insurance risk than someone who took 9 attempts to pass.

Car Insurance Discrimination
This is of course just speculation and may seem incredibly discriminatory, but using gender was seen as discrimination yet was used as a risk assessment factor for motor insurance quotes for many years. Insurance companies are more likely to focus on age, location, type of car and no claims etc but with age being banned as criteria, the door is open to new factors such as these.