EU judges are due to rule this week on whether charging women lower premiums than men breaches EU rules on sex discrimination.
If they do, female drivers under 26 are likely to see costs rise by about 25%, while men will see insurance rates drop by about 10%, according to the Association of British Insurers.
Open Europe, the think tank campaigning for EU reforms, says that translates into an average extra £4,300 more for women drivers between the ages of 17 and 25, and a £3,250 saving for men over the same period.
In a “worst case scenario”, women drivers’ cumulative insurance costs could be as much as £9,300, says the organisation.
Basing insurance rates on statistics about the differing life expectancies or road accident records of men and women is standard practice across Europe.
It is specifically permitted in EU anti-discrimination rules which allows member states to discriminate on insurance rates and benefits “if sex is a determining risk factor, and that can be substantiated by relevant and accurate actuarial and statistical data.”
But an Advocate-General at the European Court of Justice has advised judges that the concession in the EU “Gender Directive” is countermanded by “higher-ranking” equality provisions set out in the Charter of Fundamental Rights in the Lisbon Treaty.
If that legal “opinion” is upheld in the final verdict, it will mean insurers can no longer gender-based different prices on a range of products including car insurance, private medical insurance, pension schemes and annuities.
In this case Advocate-General Juliane Kokott declared that taking the sex of an insured person into account as a risk factor in insurance contracts is a clear breach of fundamental rights and “legally inappropriate”, because many other risk factors were involved in insurance assessments:
“Gender is a characteristic which, like race and ethnic origin, is inseparably linked to the insured person as an individual and over which he has no influence.” she said.
The case was brought by the Belgian consumer’s association, challenging the use in Belgium of statistics based on gender. But a ruling outlawing gender-based analysis for insurance purposes would apply in all 27 EU countries.
Labour Euro MP Arlene McCarthy said: “The statistics show that women have fewer accidents than men so why should women have to pay more for car insurance?
“If the court upholds the Advocate-General’s decision it could result in women’s insurance premiums rising by 25%.”
She said UK Department for Transport figures for 2005 showed that 95% of driving offences causing death or injury were committed by young men.