Car Insurers Should Not Use Gender to Calculate Premiums

December 24th, 2012

Females & car insurance

Gender discrimination hasn’t been part of our society for decades. Generally, men and women are treated equally in professional realms of modern society. Whether in politics or law enforcement or professional car racing, women have as much opportunity as men.

And rightfully so, of course.

There’s one area, though, where women and men are singled out and charged very different rates for an identical service.

Somehow, during the great battle for gender equality, car insurance companies have remained able to charge far higher prices to men, especially young men, than they charge their female counterparts.

If a new rule in Europe takes hold, that could change.

Last year, the European Union’s Court of Justice ruled that,

Differences in insurance pricing based purely on a person’s sex are discriminatory.

That means insurance companies can no longer factor gender into their premium costs, so as of now the rates that European customers pay for all insurance, including car insurance, will change. It’s expected that women’s rates will go up while men’s rates go down.

The insurance companies argued their case, because they believe young men are many times more likely to get into car accidents, often serious ones, than women.

The court, though, didn’t agree that’s a valid reason to charge varying rates.

This is a ruling that the U.S. courts should make as well. No other industry can discriminate so blatantly based on gender alone. If I go to the beauty supply store, I’m going to pay the same price for makeup and curling irons as a woman, even though I’m far less likely to actually use them.

There’s not a “male price” and “female price” on any other product or service available to the public, so I think Europe has made the right decision here.

Come on U.S., now it’s our turn!

Should insurance companies be allowed to charge different premiums based on gender, or is it time for that practice to end?

-tgriffith

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