Money Talks

Is it sexist that women pay less for car insurance?

Should women pay the same as men when it comes to car insurance? The answer is yes, according to one EU judge. But if a ruling determines that the current pricing system is sexist it could have a knock on effect for the rest of the insurance industry. Confused.com’s Lois Avery takes a closer look...

Cheaper car insurance for women could be a thing of the past if an EU judge decides that pricing a policy based on the driver’s sex is discriminatory.

The debate follows a statement from EU Advocate General Juliane Kokott at the Court of Justice, which says that using a person’s sex for insurance purposes goes against a person’s fundamental human rights.

The Association of British Insurers is now poring over this in effort to decide whether the system is, in fact, discriminatory.

If this opinion is taken on board then women will have to pay premiums equal to men.

But what do you think about this? The likelihood is that if you’re a man you’ll think it’s a great idea. If you’re a woman, it’ll seem preposterous.

Will Thomas, head of motor insurance at Confused, explains that “women do not pay less for their premiums because of positive discrimination but based on statistical evidence suggesting that, on average, they have smaller, less expensive accidents”.

Exactly. I agree, Will. I don’t want to pay more for my insurance to compensate for careless male drivers who are boosting premiums all-round. But as a woman I would say that.

In response to this several men have said to me that the reason they are deemed to be riskier to insure is bolstered by the number of women having accidents as named drivers on their polices.

So, it seems that this debate has reignited the old ‘who’s a better driver?’ argument.

I’m not sure where I sit with this.

Drivers across the board are suffering from more expensive car insurance - the latest Confused.com/EMB car insurance index shows that the average comprehensive policy has soared 37.5 per cent in the last 12 months, with premiums now standing at £650 on average.

As a woman I appreciate that the car insurance industry looks upon me favourably because, statistically, I drive better than my male counterparts.

Also, if gender discrimination in insurance is outlawed it will have an effect on gender-specific insurers. What will happen to the likes of Sheila’s Wheels and Diamond, whose whole pricing index is based solely on giving female drivers a better deal?

The knock on affect of an EU ruling could also hit life insurance, health insurance, annuity rates and so on, all of which are priced to suit the sexes.

I’m interested to hear what you think about this. Should insurers take a person’s sex into consideration when calculating the cost of their car insurance?

Let me know your thoughts, drop a comment below or email me: lois.avery@confused.com

Is taking out insurance with your bank a rip off?

Packaged current accounts are designed to take the hassle out of insuring yourself and your possessions, but if you don’t check the small print, you could end up paying over the odds for a service you don’t use.

Insuring yourself up to the eyeballs can be a bit of a pain especially with so many policies on offer. There’s travel, home, car, mobile phone,  pet and many more

Britain’s banks are now also in on the act offering to take the hassle out of having separate insurance policies by offering to insure you and your belongings  alongside a current account for a monthly fee, usually between £5 and £25.

But does it really pay to have all your insurance needs grouped together?

Take this, for instance. A friend of mine recently lost a shiny new iPhone. Careless yes; but ‘fear not’, he thought, I’ve got mobile phone insurance with my bank. However, it transpired that he wasn’t covered, because the hefty price tag of an iPhone – about £500 – was above the maximum cover limit under his account’s terms and conditions.

All banks’ mobile phone cover limits vary, Lloyds will cover you up to £2,000 while some sit between £500 and £800. Only recently has it become standard for banks to cover some of the more expensive phones, like Blackberry’s and iPhone’s. Sadly, for my friend, he missed the boat with this one. But he should have been told this when he took it out.

It’s not just phones that could result in a mis-sold insurance package. There’s no point spending £20 a month on an account that includes travel insurance, home insurance and breakdown cover, if you live with your mum, never travel abroad and don’t drive, for example.

Some account holders could be wasting hundreds of pounds a year and could be far better off cancelling the packaged account and buying one or two services they will use from other insurers.

The Financial Services Authority recently expressed concern about mis-selling of packaged current accounts by banks in its Financial Risk Outlook for 2010, which said:  “Packaged accounts may offer value for money for some consumers, but they may not benefit all. Consumers could be better off purchasing products individually or not at all. And some may find that where the add-ons are insurance products, they do not provide the expected level of cover.”

It goes on to say that customer’s should be aware of this and check the terms and conditions.

Read the small print

It might sound obvious but your policy document will outline what is and isn’t covered. So if you have a laptop worth £2,000 but the cover stops at £750, it’s probably not worth it. The same goes for mobile phones, travel, etc.

Banks do give a hard sell when it comes to these insurance packages and they’re often labelled as premium accounts, premier, or reward accounts so you think you’re getting something special. But remember, you’re the one paying for it so make sure it suits your needs.

Have you been mis-sold an insurance package? Or do you think they're great? Drop a comment below or email me your thoughts: lois.avery@confused.com

How breakdown firms can profit from your forgetfulness

Breakdown cover is neglected by plenty of drivers, but if you don’t have it and your motor packs in you risk paying a big fee

By Lois Avery

Breaking down is no fun, especially if you’re on a motorway or in any other potentially dangerous location and have to call in the cavalry. But, it’s even more of an inconvenience if you don’t have breakdown cover to get you out of your predicament.

I was reminded of the importance of taking out breakdown cover last week.

Thankfully, for me, I didn’t have a roadside mishap but my boyfriend did and discovered the hard way that not taking out a breakdown policy is an expensive error.

What could have been a small setback, following a tyre blow-out on his way home from work, ended up being a four-hour nightmare on the M4 hard shoulder.

Admittedly, the four hour delay was as a result of an AA call-centre error, which meant no one arrived at the scene to fix the problem within the hour promised.

This was bad enough, but the fact that it had cost him £141 to join up instantly over the phone was an even bigger blow.

Alarmingly, the actual fee for joining on the spot was just £41, not a huge amount more than you’d pay when signing up from the comfort of your home; the additional £100 was the surcharge - otherwise known as a big financial slap on the wrist for neglecting to sign up beforehand.

This means, when compared with the AA’s standard breakdown cover tariff of £28 a year – the emergency sign up is five times more expensive.

Of course the AA is not alone in levying this extra fee – all the breakdown firms do it and I agree that motorists should pay extra for emergency cover if they don’t already have a breakdown policy, but I thought this charge was a bit excessive. It seems even more extortionate when, despite paying nearly £150 upfront, you’re still on the hard shoulder gone 11pm – four hours after the emergency call was made.

But, without slinging too much mud at the AA (following a complaint they refunded the fee in full and threw in 6 months’ free membership as an apology for their error) the moral of the story is to take out breakdown cover in advance.

If it’s on your to-do list make a point of getting it done as soon as possible. I can’t imagine many people fancy paying the hefty premium for joining from the side of the road.

Have you made the same mistake and ended up paying the price? Do you think breakdown companies charge motorists unfairly for roadside assistance? Have you encountered any other problems with breakdown cover?

Let us know by commenting below. Or email me with your roadside nightmares at lois.avery@confused.com