Why car insurance can be cheap for a nurse ... but pricey for plasterers
Premium on ‘male’ jobs makes mockery of equality law
YOUNG women can still get cheaper car insurance than young men despite sex equality laws, an economist warned yesterday.
Insurers are dodging the rules that ban them from charging female drivers less by offering lower premiums to motorists who have jobs that are done mainly by women, he said.
Stephen McDonald, of Newcastle university Business School, analysed this pay-by-job system.
He found car insurance costs have plunged for young dental nurses and social workers, which are female-dominated roles.
But insurers have pushed up bills for young drivers who have jobs that mean they are likely to be male, such as construction workers and civil engineers.
Someone who tells their insurer they are a 21-year-old dental nurse is likely to get car insurance for 10 per cent less than they would have done in 2011, he said.
But a 21-year-old plasterer or civil engineer is likely to be paying 13 per cent more. This difference in premiums based on occupation was not seen in older age groups, but only for young drivers – ‘where the difference in expected claims between men and women is greatest’, he explained.
Dr McDonald, who presented his research to a Royal economic Society conference, warned the same methods may be used by insurers when it comes to paying pensions.
eu law bans them from giving more generous annuities to men, who don’t usually live as long as women. But it does not prevent them from paying rates based on the jobs pensioners used to do.
The gender equality rules, laid down by the eu Court of Justice, came into effect from December 2012. They meant that many car insurance firms had to change their pricing policies, including ‘femalefocused’ insurers Sheilas’ Wheels.
Dr McDonald said: ‘The ruling has been effective at stopping discrimination by gender.
‘However, for young drivers, for whom the difference in risk between males and females is greatest, there is evidence that firms are engaging in indirect discrimination using occupations as a proxy for gender, with insurance prices becoming relatively lower for those in femaledominated jobs.’
His report examined insurance premiums between November 2011 and November 2013 for people at four ages: 21, 25, 40 and 55. It looked
‘Indirect discrimination’
at six professions: civil engineers and plasterers, who are nearly all men; solicitors and sports hall staff, who are roughly evenly split by sex; and social workers and dental nurses, who are mostly female.
To make fair comparisons, the quotations were taken for people in the same area, Gosforth, in Newcastle.
The cut in premiums for those in female- dominated jobs was ‘not the case for the older ages,’ Dr McDonald said.
‘It suggests that this is therefore only an issue in the riskiest segments of the motor insurance market and for those ages where the difference in expected claims between men and women is greatest.’