Insuring a cheaper premium

 
 

With insurance companies no longer allowed to use gender as a basis for discrimination, Dónal Ó Catháin investigates whether this new gender-blind system actually provides equality.

This year saw a landmark change for gender equality with a new insurance system that is gender blind introduced. No longer can an insurance company quote you astronomical prices simply for being male. Although, with this comes the realisation that you can no longer escape with cheaper insurance quotes just for being a female driver.

An extract from a publication by the Department of Justice and Equality on the changes in insurance premiums which came into effect this year states that “Traditionally, gender has been one of the factors that insurance companies consider when calculating risk. Arising from a ruling on a case brought before the Court of Justice of the EU, insurance companies will no longer be allowed to quote you a different price for your insurance based on your gender.”

This is a change many young drivers have waited for, and it was brought about in an attempt to achieve gender equality in the world of car insurance. However, UCD School of Economics lecturer Dr Christopher Jepsen believes there was little problem with the original system. “Allowing insurance companies to offer different prices, I would argue from an economics point of view, seems reasonable in the sense that it’s an actuarial thing.

“It’s not like they’re actively discriminating. If indeed men are worse drivers, and so have a higher likelihood of accidents and thus higher insurance, economics would say that’s fine. The rate is just reflecting the costs. I don’t think of that as discrimination.”

When asked whether he believed it to be fair that safe male drivers should have to pay more because of other irresponsible members of their sex, he explains, “Is it fair that [young students] pay higher car insurance than I do, because young drivers have a lot more accidents than older drivers?

“As an old driver, I feel I shouldn’t have to pay more just because I’m male because they [young males] have more accidents. It’s nothing personal. Younger males simply have more car accidents. Is it fair? It’s just actuarial, statistics. Are statistics fair?”

 

But can dangerous driving really be examined on as basic a level as gender? While some argue it as stereotyping, there are statistics to substantiate the claim that young men especially are more dangerous drivers.

Figures from the 2011 RSA Collision Fact Book, representing car drivers fatalities by age and sex saw that three times as many male drivers between the ages 17–24 suffered fatalities in comparison to their female counterparts. In fact, deaths among males were higher in all age categories up to 65-years-old.

According to the RSA, for male car drivers in general, the risk of dying in a traffic crash is about two times higher than that for female car drivers. In 2011, the RSA claimed, “Among all car drivers, 17–24 year old male drivers were six times more likely to be killed on the road.”

This is a phenomenal figure, proving that there is obviously a large element of truth to the ‘boy racer’ stereotype. Dr Jepsen, however, is dubious of the benefits the equal premiums law could really provide. “With the car insurance, I don’t see the benefit of doing it, why should male drivers have cheaper car insurance if they cause more accidents? I don’t see discrimination there. I think maybe men should be more cautious.”

Feminist groups campaign endlessly to eradicate the large gaps in gender equality, be it in terms of wages, social standing, or any other of the numerous factors they believe to be unfairly affecting them. However, unequal car insurance premiums are one of the few gender issues that discriminates against males while benefiting women.

Many male drivers hoped the equal premiums law would reduce their car insurance charges, bringing them closer to the figures previously paid by female drivers. However, this is not that case. Rather, insurance premiums for all young drivers have risen to the same high level, causing a new problem.

Feminist groups campaign for equal pay and argue that there is a noticeable gap between what males and females earn in the workforce. An issue that has not been addressed officially in great detail. Jepsen observes, “There’s the irony, women get paid less, but they’re going to pay higher car insurance and [now] men are going to pay less.”

Some argue that this difference in wage levels can be accounted for, at least in part, by factors such as the fact that women tend to go on maternity leave or even leave the workforce entirely to raise families. Gender can play a part in wage levels, but can no longer play a part in insurance premiums.

So, while women continue to earn less, their insurance costs are steadily rising to meet those of their male counterparts. In essence, what appears on the surface as discrimination is most likely just economic and statistical factors at play, whether it be regarding car insurance premiums or even the wage gap.

This equal insurance policy premium won’t do much to help the economy. Rather, it will just reduce expenses for young male drivers. As Jepsen explains, “By doing this you’re going to make the insurance market less efficient and certainly in Ireland the market is not particularly efficient to begin with. You’re just making it even less efficient.”

Rest assured, curbing the discrimination by insurance companies will be bringing joy to joyriders in a local outlet carpark near you soon.

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