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Age Discrimination Rife Within Motor and Travel Insurance

ConsumerWatch / Insurance May 05, 2009 - 03:00 PM GMT

By: MoneySupermarket

ConsumerWatch

Best Financial Markets Analysis ArticleWith the Government's Equality Bill published today and 'appropriate age-based treatment' allowed, research from moneysupermarket.com finds Brits will continue to be punished with high travel and motoring premium costs on the grounds of their age.


  • Equality Bill published today allows insurers to price policies based on age
  • Travel insurance 100 per cent more expensive aged 66 compared to aged 65
  • 'Boy racers' see an overnight drop of 52 per cent to motor cover cost aged 18

Travel insurance - the overnight price hike when you turn 66 years old The UK's leading price comparison site looked at how the cost of travel insurance changes for Brits on their 66th birthday.  Those travelling within Europe or long haul can expect to fork out more than double for an annual multi-trip policy when they turn 66 - an increase of 106 per cent.1

Maxine Baker, travel insurance manager at moneysupermarket.com, said: "Brits turning 66 will be shocked to see an overnight hike in the cost of their travel insurance, with no further medical evidence to suggest they might be at higher risk.  Now that the Equality Bill has sanctioned 'appropriate age-based treatment', it means some travellers will continue find their premiums rise considerably on their 66th birthday. I had hoped to see a distinct shift in insurers' attitudes towards older travellers, but the new Bill just means insurers can continue to class older travellers as higher risk."

Motor insurance - younger drivers face a rough ride Despite older Brits facing overnight price hikes for travel insurance, this is not the case for motor cover, with sixty-something drivers seeing only a gradual increase in the cost of their motor insurance premiums. 

The story is different for younger drivers. A 17 year old male living in Lancaster will find car insurance costs an average of £3015 a year - 52 per cent more than if they wait until they turn 18 when the cost of the policy drops to £1,453. There are more savings to be made if they wait until their 19th birthday, when cover only costs £800 per year.2

While female younger drivers getting behind the wheel often find their premiums are cheaper compared with their male counterparts, the price differences per year are no less stark. A 17 year old female driver can expect to pay £1943 a year on average - 57 per cent more than an 18 year old when the cost of policy falls overnight to £843.

Steve Sweeney, head of motor insurance at moneysupermarket.com, said: "Using age as a broad brush for evaluating risk has been a bugbear for older travellers and younger drivers for years. With the Equality Bill stating that 'an insurer can lawfully quote higher motor insurance premiums for young men', insurers will continue to use age as a legitimate form of risk assessment. Ultimately, I think people should be treated fairly based on their own individual risk profile."

Steve Sweeney added: "It is surprising these overnight price fluctuations still occur. Young and newly qualified drivers have long been perceived as high risk by the insurance industry and often find it hard to get competitive motor insurance. There is no doubt that the curse of the 'boy racer' lives on too; insurers view women as far more mature motorists at an earlier age."

moneysupermarket.com offers the following tips to younger drivers to cut motor insurance costs:

  • Shop around - The Association of British Insurers says you can save 35 per cent by comparing as few as five insurance providers.
  • Buy online - Many car insurance providers offer discounts to customers that buy online.
  • Mileage limit - Consider a mileage limit or to only drive at certain hours of the day.
  • Car security - Make sure you have an alarm and immobiliser.
  • Drive a car with a smaller engine - A newer, more reliable car that is less likely to be used by 'boy racers' will have a cheaper premium. Aim to drive a car like this for at least two years after passing your test - and forget about turbo-charged cars, with big spoilers, fat tyres, alloy rims and other "sexy" extras.
  • Parents - If at all possible, avoid being added to a parent's insurance policy. It prevents you from building up your own no-claims bonus. And if you are the main driver or registered keeper of the car, DO NOT insure it in your parents' name and put yourself down as a named driver. This is known as "fronting" and in the event of an accident it could mean the claim is not paid. Moreover, the younger driver can be charged with driving without insurance.
  • Pass Plus - This is a certificate where a young driver who has already passed his or her driving test receives specific lessons in night, motorway and town traffic driving; achieving Pass Plus can earn significant discounts (as much as 35%) on your car insurance.

Notes :

1 Annual multi trip travel insurance policies for Europe for a male traveller:

Sourced by www.moneysupermarket.com 21.04.2009

Annual multi trip travel insurance policies for Worldwide (inc USA & Canada) for a male traveller:

Sourced by www.moneysupermarket.com 21.04.2009

2 Motor insurance premiums for younger drivers 

Based on student male living in Lancaster with 0 years NCD at 17 building to 5 years NCD at 22 driving a Ford Fiesta 1.2:                                                                                                      

 

Age 17

Age 18

Age 19

Age 20

Age 21

Age 22

Age 23

Top Premium

£2,962.94

£1,387.62

£646.30

£449.65

£305.84

£225.74

£212.33

Second Premium

£2,982.41

£1,420.61

£791.58

£464.10

£308.70

£231.00

£218.40

Third Premium

£3,011.10

£1,463.39

£798.35

£493.51

£368.73

£236.25

£225.75

Fourth Premium

£3,051.83

£1,487.90

£857.93

£606.10

£400.05

£256.20

£240.45

Fifth Premium

£3,067.75

£1,505.00

£904.81

£624.97

£409.01

£282.45

£270.90

Average

£3,015.21

£1,452.90

£799.79

£527.67

£358.47

£246.33

£233.57

Sourced by www.moneysupermarket.com 22.04.2009 

3 Based on student female living in Lancaster with 0 years NCD at 17 building to 5 years NCD at 22 driving a Ford Fiesta 1.2:

 

Age 17

Age 18

Age 19

Age 20

Age 21

Age 22

Age 23

Top Premium

£1,876.58

£759.94

£391.57

£307.58

£228.65

£181.65

£175.88

Second Premium

£1,912.01

£801.42

£420.00

£330.51

£241.50

£187.95

£178.50

Third Premium

£1,969.36

£813.95

£481.95

£330.75

£244.65

£199.50

£197.40

Fourth Premium

£1,976.27

£911.65

£514.85

£355.95

£258.30

£215.25

£212.10

Fifth Premium

£1,978.34

£927.73

£525.04

£387.45

£275.10

£222.60

£219.45

Average

£1,942.51

£842.94

£466.68

£342.45

£249.64

£201.39

£196.67

By moneysavingsupermarket.com

The Price Comparison Site

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2017 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

Theresa
27 Oct 11, 12:23
Travel Insurance

My husband and I are finding it difficult to get travel insurance for over 65s with pre existing medical conditions. We are both fit, exercise regularly, eat healthily and are non smokers. Our medical conditions are regularly reviewed and treated by our GP.

In future, we will not take out home, car/s and other insurance with any company that discriminates against people like us, who have always insured but never claimed.


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