Sex matters. It is about to matter a lot more. From December it becomes illegal for an insurance company to notice what gender you are when selling you insurance.
This will have massive implications for motor insurance and unfortunately a lot of Irish people just don’t know that it is coming. It had been in the news a bit since the European Court of Justice made its ruling last year but very few people realise that it is about to hit them hard.
It will have serious implications for life insurance and annuities as well but it will take time before that becomes obvious. Anyone with a car – and that is 1.36 million households – will feel the effect straight away.
If you are a woman your motor insurance premium is about to go up. Depending on how young you are it could go up a lot; as much as 50% in some cases for women under 25.
If you are a man of the same age you are in for a windfall. The very high premiums offered to young men must now be mixed in with the females and charged equally. Happy days, you are in for a bonus.
In fact we could nearly shorten the whole process by getting her to reach into her handbag for €500 and hand it to him. That is about how fair it is as well.
It is unfortunate but undeniable that young men have a vastly higher risk of crashing their car than anyone else on the road. There may be lots of reasons for this and things that you can do about it but you cannot deny the simple fact.
Because insurance companies are now forced to deny it, they will have to balance their books. Higher charges for young women and lower for young men will be an immediate effect.
Within a few weeks the first people will start receiving their insurance renewal notices and will start realising the difference that it makes. Parents with adult children as named drivers will be hit in the same way. The sons will become cheaper, the daughters more expensive.
I imagine there will be outrage when the time comes. Our advice to everyone is to do a bit of research now on how you might be affected and what you might do about it.
The main thing drivers can do is to shop around. The insurance companies are having to react and they do want your business, so push them on that and see what they can do. We ourselves for example are working on various value propositions for younger drivers in particular.
There are also deals that you can do either with your insurer (maybe by getting extra discounts or buying something else from them ), or there might be professional group schemes that you could look at that would take some of the sting out of it for you.
We are starting to get a lot of questions about it and we have put some material up on our website. People are already trying to find ways to pick holes in the rules to pay a cheaper price – which is a good thing, but you have to be cautious.
You have to be honest with your insurer; after all you are entering into a legal contract with them. So for example you can’t switch a husband and wife policy around to make her the main driver if she actually isn’t.
Don’t tell fibs about your penalty points, your mileage or where you park the car at night. The insurer may not pay your claim in full if you haven’t fully disclosed all facts to them.
Another tempting way to reduce price is to slim down what you are buying. The old ‘third party’ and ‘comprehensive’ descriptions of motor insurance don’t really hold true any more. ‘Comprehensive’ can come with or without a whole range of goodies, bells and whistles that you may or may not want.
You could get a policy with a higher excess for example, or without no claims bonus protection. I would be reluctant to advise that though because it basically means you are taking some of the financial risk yourself.
We are stuck with these rules like them or not. Whether you are one of the winners or one of the women, you should take a fresh look at what you pay for your insurance next time it comes around.