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Young female drivers hit hard by EU changes as insurance costs soar by a fifth in just 12 months

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Young women have been hit by the largest increases to car insurance premiums ever recorded for an age group over the past year, as EU rules on gender discrimination removed the discount they have traditionally enjoyed over their male counterparts.

The average quoted comprehensive premium for a 17-20 year old woman rose by an eye-watering 20.7 per cent in the last 12 months, according to research in the Confused.com/Towers Watson car insurance price index. This is the biggest year-on-year jump ever recorded for any age group.

Yearly car insurance costs for young females are now at an all-time high average of £2,256. But at the same time, young male motorists have seen prices plummet. The average quoted price for a 17-20 man fell by an average of 21.6 per cent over the past year.

Hit hard: Young female drivers have seen car insurance prices soar since the EU Gender Directive began in December

Young female motorists have traditionally enjoyed much lower car insurance premiums than their male counterparts due to the fact they are statistically less likely to make a claim.

However, under the EU Gender Directive - which took effect on 21 December 2012 - insurers are no longer able to use gender as a factor when pricing insurance.

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Gemma Stanbury, head of car insurance at Confused.com says ‘With the EU Gender Directive coming into effect late last year, it’s clear to see that the insurance industry has reacted to the change in legislation over the last quarter.'

‘The most recent results from the Confused.com Car Insurance Index reveal, as expected, that women have experienced the greatest increases to their car insurance premiums. As a result, women aged 17-20 are now facing record prices of £2,256 on average for their car insurance.

‘At the opposite end of the spectrum, their male counterparts are enjoying huge price decreases of up to 21.6 per cent as the industry attempts to level out car insurance prices.’

Steep rises: Young female drivers have seen prices rocket in the last thee months

Men the winners as premiums costs plummet

The average comprehensive car insurance price now stands at £736, compared with £816 this time last year. This means there has been a year-on-year decrease of £80, or 9.8 per cent.

For Third Party Fire and Theft cover, average premiums stand at £1,169, showing a slight increase of one per cent year-on-year.

 

In the first three months of 2013, men paid £748 on average for their comprehensive car insurance premium, a reduction of 13.9 per cent compared to the same time last year.

Women on the whole did see a slight drop in premiums. They now pay £721 on average, a 3.9 per cent decrease over the same period.

As a result of these price changes, the difference between men and women’s car insurance premiums on average now stands at just £27.

This is a huge contrast to price differences seen this time last year, when men were paying £117 more than their female counterparts.

However, a larger price gulf remains in the younger age group. Currently, 17-20 year old males pay £2,848 on average for their comprehensive car insurance premiums, with females of the same age paying £2,256 – a price difference of £592.

However, this price gap has reduced dramatically over the years, with the biggest difference seen in the first half of 2011, when men aged 17-20 paid £1,787 more on average for their car insurance than women.

AA: CAR INSURANCE COSTS GO INTO REVERSE

The average price for car insurance fell slightly in the first three months of 2013, according to the AA car insurance index on Thursday, but only for fully comprehensive policies as third-party cover continues to rise in price.

The motoring organisation's quarterly British insurance premium index found the average quoted premium for annual comprehensive car insurance is £747 – a fall of 1.4 per cent since the beginning of the year.

The latest fully-comprehensive insurance figure is also 4.1 per cent down on this time last year but policies covering third party, fire and theft (TPFT) have edged up, rising two per cent since the beginning of the year to just under £1,128 now - a figure which represents a 0.9 per cent rise on the average this time last year.


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