Monday, November 12, 2012

Off-Topic: The UK gets it right on gender equity in auto insurance

From the BBC:  "Women are being urged to check their car insurance ahead of a new rule coming into force next month which will ban firms from taking gender into account. It means female drivers will see their premiums go up by as much as 25% after 21 December."

Brogan Mooney, 18, doesn't think it's fair that young women will have to pay around 25% extra. "I've been driving a year now and I've had no crashes and no claims, so I should be rewarded," she says.

What isn't fair is is the current system, where all young men -- even the ones who drive safely -- are penalized with higher premiums just because they were born male.

Safe drivers should pay the same whether they are male or female. Reckless drivers should pay the same, but more than safe drivers, whether they are male or female.  Why is this in any sense controversial? 

And, yes, yes, I know -- for a long time, insurers got away with discriminating against individuals based on gender by hiding behind their precious actuarial tables. Make no mistake, they only got away with it because people allowed them get away with it. Actuarial tables will also show differences based on skin color, but no rational person thinks it's fair to use race as a criteria to set premium rates.

It is unfortunate that President Obama, who has won applause from women's groups by bringing gender equity to health insurance, hasn't noticed that a lot of young men are being penalized when it comes to auto insurance just because they were born male.

At least on this issue, the UK got it right.