Ban on age discrimination could cost drivers and travellers
April 6, 2009 by admin
Filed under News, News-Insurance
According to a recent report both drivers and holidaymakers could find that the cost of getting insurance will soar as a result of a government initiative to try and ban age discrimination in these industries.
The car insurance and travel insurance industries have always priced the cost of cover based on the age of the person being insured, but if the government puts a stop to this then all other customers could find that the cost of cover rockets.
With car insurance it is often younger drivers that bear the brunt of higher premiums due to the increased risk of accidents and claims. For the same reasons it is usually older travellers aged over sixty or sixty five that often get penalised with higher premiums on travel insurance.
However, the government wants to try and put an end to this age discrimination, and whilst this could be good news for those in these age groups it could mean paying through the nose for cover for all other customers.
The Association of British Insurers has stated that it is important for insurance firms to be able to take age into consideration when pricing policies, as this basically allows the insurance providers to assess the risk of claims.
One ABI official said: ‘The age discrimination legislation may be well-meaning, but it creates unintended consequences. At the end of the day, what we are assessing is risk. And in this respect age is a factor. We won the argument over the relative risk between men and women drivers. We hope ministers will listen to reason over age.’
An ABI director added: ‘Insurers only use age where it is relevant, and restricting their ability to do so would rebound on all customers, through higher premiums.’
Tags: whilst, car insurance, cost, holidaymakers, respect
