An insurers' group has issued a warning over the new legislation - claiming that across-the-board premiums increases could result from it.
A new government law change aimed at ending age discrimination could increase car insurance premiums for all, insurers warned this morning.
According to the Association of British Insurers (ABI), the upcoming Equalities Bill will also lead to "less choice", with insurance providers legally obliged to not use age as a factor in assessing risk. This is despite the fact that elderly and younger drivers are statistically proven to be more likely to suffer road accidents.
Figures from the ABI also show that, for car insurance, the average cost of a claim for those over 80 is 50 percent higher than that of a 60-year-old. Nick Starling at the insurers' group added: "The insurance industry is committed to treating people fairly, and is opposed to unfair discrimination. The government, organisations that represent older people and the insurance industry agree that premiums should reflect individual risk."
The ABI's stance found support among car insurance providers. 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."
The Equalities Bill is scheduled to enter parliament in the 2009/10 session.
