Car insurance 'will cost young women £500 more a year'

Direct Line, the insurer, claimed this week that under the proposed new European Union Gender Equality Directive, car premiums for young female drivers could rise by £500 per year.

Direct Line, the insurer, claimed this week that under the proposed new European Union Gender Equality Directive, car premiums for young female drivers could rise by £500 per year.

Car insurance rates are based on driving history and experience, gender, age, where the car is kept and what kind of car is being insured. The planned directive argues that insurers are discriminating against women by using gender in calculating insurance premiums.

But Direct Line has found that if the directive became law, female motorists between 17 and 24 would suffer the most, followed by male drivers over the age of 80. Emma Holyer, Direct Line's motor spokesperson, said: "In the UK we have sophisticated methods of calculating insurance that ensure that motorists pay the premium that reflect their driving skills. And our research shows that the public supports the present way insurance premiums are calculated."

Henry Bellingham, the Conservative shadow Industry minister, said: "This is another example of an ill-thought out Euro Directive. It is bad enough when this sort of directive distorts business initiatives, but it is worse still when customers suffer. I will be working with my colleagues in the European Parliament to try and persuade the European Commission to drop this daft idea, and I also plan to tackle DTI Ministers in the House."

Gerry Bucke of Adrian Flux Insurance says women are at lower riskthan men and deserve lower insurance rates. Women make 17 per cent fewer claims, and their claims cost 32 per cent less than the average man's claim, while young women aged 17 to 22 cost 40 per cent less to insure than their male counterparts. Mr Bucke said: "It is ironic that a directive designed to stop unfair discrimination will instead discriminate against the very people it is claiming to help."