Car insurance premiums could double for some drivers if age discrimination legislation is extended, insurers have warned.
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AA Insurance said ‘the majority’ of drivers would pay higher premiums if the Equalities Bill, which is due during the 2009-2010 session of parliament, is extended to cover the sale of insurance.
The firm said age is one of several factors, including a driver’s sex, that affects risk and enables products to be tailored fairly to the individual’s needs.
Simon Douglas, director of AA Insurance, said: ‘An unintended consequence of applying age equality to car insurance will be a reduction in premiums for a few at each end of the age range but an increase for the majority.
‘There is a significantly greater likelihood of a claim being made especially by young and inexperienced people. Similarly, as age advances, the likelihood of being involved in a collision increases.’
Nick Starling, director of general insurance and health at the Association of British Insurers (ABI) said: ‘Insurers only use age where it is relevant, and restricting their ability to do so would rebound on all customers, through higher premiums and less choice. Any legislation should tackle genuine discrimination, not insurance where the use of age helps to ensure a wide range of products at competitive prices.’
But Paul Cann, director of policy and external relations for Help the Aged, said the ABI was missing the point, as the legislation did not propose removing age as a measure of risk entirely, but only where it was used as a blanket exclusion.
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