In the wake of falling car insurance premiums due to exclusive ‘young driver’ policies, most critics are now saying that this is just a temporary relief, which won’t last long. A controversial equality decision was passed by the EU that cut major costs to allow young drivers the cheap car insurance they always wanted.
Recently, a ruling announced by the European Court of Justice declared that insurers are not supposed to charge premiums on the distinction of gender. Till now, insurers had been biased in providing different premiums on the basis of gender, since studies revealed that young men are twice as likely to be involved in accidents as young women drivers.
The Daily Telegraph reported that insurance premiums have already started dipping for young males under the age of 24, owing to the aforementioned ruling, which will come into effect by December, 2012.
Simon Douglas, the director of a reputed insurance company, said that the prices are set for further dips by the new year, courtesy the recession.
“The sever-year insurance cycle topping out has coincided with a bad recession. Something had to give,” said Douglas while speaking to the Daily Telegraph.
Sources claim that insurance companies have already prepared for this by revising pricing structures beforehand. With a 6% overall fall in premiums for either sex, women and men are reaping the benefits of the European Court of Justice’s decision.
Many insurance companies have already launched policies favouring young male drivers. Most of these policies require installing a black box to monitor driving speed, corner cutting, acceleration and braking.
By keeping checks on a driver through the black box, the company can reward the driver by cashbacks and reduced premiums if he drives safely.
However, critics are denouncing the seemingly rosy picture by claiming that these measures are just a ploy by the car insurance companies to attract young drivers before December arrives and premiums soar. This will also mean that young drivers, now tied with their insurance premiums, will have no option but to cough up.