Europe Prepares For Unisex Car Insurance

In Britain, gender is a huge factor for determining car insurance rates. Starting in December 2012, however, the gender factor will be eliminating, finally balancing the cost of insurance for both sexes.

In America, drivers understand that age and gender have a direct influence on car insurance rates. Male drivers in the U.S., for example, cost a lot more to insure than the counterpart female driver. This discrepancy in insurance rates is what led the European Union to eliminate gender as a determining insurance factor.

Starting December 21, 2012, men in the EU are going to be charged much less for car insurance. The average British man under 20 years old pays roughly $4,675 a year for car insurance, while the average woman under 20 only pays $2,441.

Car insurance companies call this gap the gender directive. In 2004, the European Court of Justice made a final ruling on the gender issue, which extends its reach into the realm of financial and insurance contracts throughout Europe. Britain, Italy and Ireland are the countries expected to see the most change in insurance rates.

However, the news is not all good. Rather than simply seeing male drivers' rates decrease, experts are expecting to simply see a dramatic rise in the rates that female drivers pay. The rates will be equalized by bringing the female cost up instead of dropping the male cost down.

And the price gap is a big one to fill. A 16-year-old female driver in Europe, for example, pays $3,689 per year for car insurance. Her same age male counterpart pays $4,287, creating a difference of 16 percent between the two.

As drivers get older, the rates begin to balance out and even shift in the opposite direction. A 25-year-old female driver pays $1,616 per year, while a male driver pays $1,593.

Of course, in the U.S. gender is only one of many factors, including zip code and driving record.