Women's car insurance to cost £360 more thanks to new EU ruling

Younger women drivers will see the cost of their car insurance rise by hundreds of pounds when new European rules are introduced at the end of this year.

This latest ruling stipulates that insurers cannot discriminate on the basis of gender when setting insurance premiums, despite the fact that women drivers are less likely to have a crash and are involved in far less serious road accidents.

Last year The Daily Telegraph disclosed that insurers had received legal guidance that this new ruling would become law when the European Court of Justice (ECJ) made its judgment. As well as pushing up the cost of women's car insurance , the ruling will also lower annuity rates for men, meaning millions will get a lower pension in retirement.

Woman drivers will have to pay more for their car insurance (Image © Fotolia)

The Labour transport spokesman, John Woodcock, has called on the Government to take action to mitigate the worst effects of the new ruling. He said that on average women would end up paying an additional £362 a year for their insurance.

But this "average" masks the fact that younger drivers face far steeper increase. According to figures from the AA, women aged between 17 and 22 pay an average of £1,799 a year for car insurance, while men in this age group pay a staggering £3,163.

In order to "equalise" rates, women in this age group are likely to see far higher increases, as they will effectively have to pay premiums that reflect the risk of younger, more aggressive male drivers the so-called "boy racers".

Treasury analysis has shown that women will see their premiums increase by 24pc, while men will only see a 9pc reduction in costs as a result of the EU ruling.

The AA said this latest increase came on top of steep rises in the cost of car insurance. Figures from the motoring organisation show that over the past five year the cost of car insurance has more than doubled. In 2008 the average comprehensive policy cost £481 in January this year the same policy cost £971.

Experts say the overall cost to UK customers of the ECJ's judgment which was based on a case brought by a consumer group in Belgium will be almost £1bn.

Motoring groups warned that the ruling could lead to more deaths on the roads if young men benefiting from lower premiums buy faster cars.

Insurance companies said women could benefit from lower insurance premiums if they opted for "black box" technology. Here insurance premiums are based on driving habits how often people drive, what time of day they drive, whether they break speed limits etc.

Both men and women who drive safely could benefit from lower premiums, which are based on individual data rather than gender-specific assumptions.

Malcolm Tarling, from the Association of British Insurers, said: "This gender ban is disappointing news for UK consumers and something the UK insurance industry has fought against for the last decade."

Douglas Carswell, the conservative MP, said: '"Three weeks ago the Prime Minister held a meeting for the insurance industry at Downing Street. But because we are not prepared to do anything about Europe, we can do absolutely nothing about this madness."