New insurance rules could cost women drivers £300 a year

Women drivers could face a 40 per cent rise in their car insurance premiums in the EU.

New EU rules which raise women's car insurance costs have been slammed as "gender equality for gender equality's sake".

London MEP (Member of the European Parliament) Marina Yannakoudakis said: "Only in the EU could penalising both women and men be seen as a kind of fairness."

Ms Yannakoudakis, Tory spokesman in the European Parliament on women's rights, hit out on the day that new "gender-neutral" pricing rules came into force.

The rules follow a European Court verdict on sex discrimination and affect areas where different standards apply to the sexes - notably car insurance and pension ages.

Applying equality rules means that men are likely to get lower pension annuities, while women will pay more for car insurance where traditionally they are considered safer drivers and therefore pay lower premiums than men.

Ms Yannakoudakis said women drivers could face a 40 per cent rise in their car insurance premiums, with female drivers under 30 set to be hit hardest. Male pensioners could be left up to $10,000 worse off in retirement.

She said: "This ruling is gender equality for gender equality's sake.

"It flies in the face both of common sense and the overwhelming evidence that women drivers represent a lower risk to insurers.

"Women drivers who have not already changed their policies should shop around to ensure that they get the best deal."

It was in March last year that European Court of Justice judges in Luxembourg rewrote the rule book for insurance companies by banning risk assessment based on gender.

Using differences between men and women as a risk factor in setting premiums for car and medical insurance and pension schemes breaches EU rules on equality, declared the judges.

The verdict forced changes in the current standard practice across Europe of basing insurance rates on statistics about differing life expectancies or road accident records of the sexes.

The Association of British Insurers estimated that the decision will actually reinforce price discrimination, with women drivers under 26 in the UK facing at least a 26 per cent rise in car insurance rates, with a 10 per cent drop in rates for men.

Up until now, discrimination in setting insurance rates was explicitly permitted under EU equal treatment rules, which stated that discrimination was permissible "if sex is a determining risk factor ... substantiated by relevant and accurate actuarial and statistical data".

But the judges decreed that equality provisions set out in the Charter of Fundamental Rights of the Lisbon Treaty took precedence.