Car insurance companies in Europe that are looking for a way to work around the ban in Europe on charging different rates to male and female drivers are considering innovative new technology using black boxes that may completely change the way that auto insurance premiums are calculated.
The largest automobile insurer in the United Kingdom, the Royal Bank of Scotland, is one of the companies currently investigating and testing the use of this technology, which uses a small device to monitor the way that customers use their vehicles so that their rates can be charged according to the riskiness of their driving habits.
Though insurance companies have balked at the use of telematics techniques until now, as a result of the higher costs that they present, these firms now hope that they will be a practical way to avoid significant price hikes that will be necessary as a result of the European ban that will become effective in 2012, and that may cause them to lose customers.
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Deloitte consultants insurance partner, James Rakow said that the gender directive has been vital to the renewal of interest in the use of the telematics technology. He went on to say that “Most definitely, this second wave of interest seems to have got a foothold in the market.”
According to the GDV insurers’ lobby in Germany, which commissioned research on the topic, the reason that men are currently paying so much more than women for their car insurance is because they are statistically more likely to be in a crash while driving. Once the ban goes into effect, it will no longer be permitted for insurance companies to take this risk factor into account, so they will need to level the rates by charging 11 percent more to women drivers.