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When “Equality” Means Unfairness

Fanatical adherence to a belief often signals trouble. It’s time to renew my car insurance, and frankly my dears I am being robbed blind in the hallowed name of equality. As a reasonably safe middle aged driver, with no claims (and not even any points for speeding at the moment) the premiums I am being quoted are absurdly high; far higher than the years following a minor accident I had about ten years ago. You’d think I was driving in F1.

Statistics show that young men are ten times more likely to be killed or injured than a driver aged over 35. Their accidents are more serious and the associated costs are higher. But in 2011, the European Court of Justice ruled that taking gender into account as a risk factor in setting insurance premiums ran contrary to equality requirements. Gender-neutral pricing rules came into force in December 2012 and now we all lose out because women (especially those under 30) have higher insurance premiums and men will receive lower pension annuities. It is estimated that in the United Kingdom, women drivers are facing a 40 per cent rise in their car insurance premiums and British male pensioners could be left up to £10,000 worse off in retirement, thanks to the ruling. (But we’re all equal so that’s alright. Not.)

Well, it’s not all bad news. This weekend I read with interest that the AA reports that the cost of car insurance is falling at a record rate in the UK. So far so good, but despite the fall, premiums remain much higher than they were six years ago. The average annual comprehensive car insurance quote fell to £594.84 this month, down 9.8% from £659.53 last July. This level of premium is likely to lead to far more drivers being prepared to take the risk and drive uninsured. I was hit by an uninsured driver once. The insurance people couldn’t have cared less – didn’t even bother to report it to the police. I took the hit (in every sense of the word),even though it was the other driver’s fault.

The downward trend is due to several factors.

  • A clampdown on fraud and restrictions on claims management companies.
  • The introduction of a ban on referral fees was introduced. They were paid by lawyers and claims management firms to breakdown firms, brokers and the insurers themselves, in exchange for providing information about accident victims.
  • Anyone suing for accident damages with the help of a no-win, no-fee lawyer now has to pay their lawyer's success fee from their own funds if they win their case. Formerly, it was added to the bill of the losing party.

Delighted to hear that about the no win-no fee mob. Following an undisputed accident where another driver hit our car at a very slow speed about two years ago, it was all sorted out quickly and I’d forgotten all about it when I received a phone call from one of these folks suggesting that we must have been hurt. Whiplash at the very least. Inability to work for months probably, he suggested hopefully. When I said very firmly that nobody was hurt, he started murmuring about the “emotional trauma” we must have suffered and I said tartly that what he was suggesting was dishonest, that he was disreputable and a disgrace to his mother and then hung up.

The increase in fraudulent claims of this type in recent years was responsible in part for very sharp premium increases between 2009 and 2011. Improved fraud detection by the insurance industry and tightening of the law is beginning to curb the number of spurious injury claims.

Well, we are where we are. I am still trawling through the beauty parade of insurance companies to see what the best deal will be. Maybe this time next year the premiums will have come down a little further still. We can but live in hope :-)

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