A European legal ruling could cost young women drivers £4,300 extra in insurance premiums, it was claimed yesterday.
EU judges are due to rule tomorrow 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 tomorrow’s 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.
Open Europe says a verdict scrapping differentials will oblige UK insurance providers to raise an estimated extra £936million to cover themselves against “new uncertainties” created in the market.
Open Europe research director Stephen Booth said: “Giving EU judges free reign to rewrite laws that the UK Government has signed up to in good faith can cause hugely damaging and unforeseen consequences.
“That these judges would magically rule that young women should pay more in the name of equality is simply perverse.
“Instead of making prices fairer between men and women, this ruling would increase costs for consumers taken as a whole.”
“This is a perfect illustration of how giving ever greater powers to unaccountable EU judges does not only come with a democratic cost, but can also have massive economic costs for individual consumers and the wider UK economy.
“Clearly, we need some checks and balances in place to make sure this doesn’t happen again and again in other areas of EU law.”