Should Sex of Drivers Be Discounted on Car Insurance Price Equation?
Reasonably auto insurance companies base their rates on the risk associated with gender, location and the vehicle driven. Nevertheless gender equality appears to be going too far at least by the EU view point. Last week European court ruled that insurance firms can not use sex of drivers as a determining factor while they are figuring out their quotes.
First of all why a court feels the need to interfere in the calculations of rates? How could their arrangement be better than accumulated wisdom of insurance underwriters? And most importantly how far they honestly like to fix the things that are not broken? Inappropriately European justice has not got a clue about the meaning of insurance. They have discounted many factors and stats in insurance rate equation into gender equality and brought a serious inequality as a result.
What else they would come up with? Should the vehicle insurance companies not be permitted to establish different rates based on the age of the insured? Undoubtedly that is age discrimination. Could it be alright to apply the same rate for a senior who has been driving vehicles for over 30 years and a teenager who has just got his license? Would that be Age equality or telling the older person to make up for the risks come with younger driver?
Whilst statistics are as clear as daylight how could you demand female motorists to pay the similar vehicle insurance rate as male ones. 90% of all the fatal crashes involves male motorists. How could you ask the insurers ignore such convincing facts and go ahead and charge everyone same rate regardless of sex? It is completely opposite in life insurance since men have shorter life expectancy than women and would be paying less..
At the end, let us hope that judicial interference does not go beyond EU. In current circumstances in which auto insurance prices keep going up you would not expect that these judgements will bring down the rates male drivers are charged. Instead it would simply increase the premiums female drivers have to pay.
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