What Brexit means for your car insurance

What Brexit means for your car insurance

Latest Motor News // 18 August 2016

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The shocking vote to leave the EU had many repercussions for the people of the United Kingdom, including some effects on your insurance. But what repercussions are there? Let’s find out.

The recent price hikes in car insurance have rocked many. The rise of 19% of insurance for drivers over 60 years old means they now pay £715 today in comparison to £600 a year earlier. Coupled with increasing insurance price, petrol prices, insurance premium tax and Brexit, it looks like affordable car insurance is at risk.

The full and true impact of Brexit when it comes to car insurance isn’t visible just yet; however, indicators show a reform in gender pricing.

Statistics show that women are less likely to be in a car accident than their male counterparts.

European Court of Justice

A ruling from the European court of justice in 2012 saw the end to gender-based pricing. Since male drivers are more likely to be involved in an accident, women’s insurance costs were naturally lower. However, this ruling saw the drop in women’s insurance while it increased for men.

Britain’s exit from the European Union may mean car insurance prices may also change. If any major changes do occur they won’t happen overnight and will likely come into effect in 2 years time.

The 2012 ruling ensured a minimum level of insurance protection in every country within the European Union. Now that the UK has exited Europe this would not be so.

The increased regulation would mean lowered profits for insurers and may force some to exit their markets. Many of the UK’s car insurers are based in Gibraltar due to lower competition prices, and as many insurers are unable to enter the UK market as a result of Brexit, premiums are due to increase.

There is a minimum level of car insurance that is required across the EU by members. Now that UK have chosen to exit the EU, new minimum levels of cover and further protection could be needed to travel around Europe, this could increase the premiums.

Britain wasn’t part of Europe’s passport-free Schengen area, so the usual passport checks will take place at borders. Once within the EU, you’re free to travel as you wish.

The international effects

If a strong independence is formed in the UK, and the EU continues to exist in political unrest, emerging nations such as Brazil, India and China could be attracted to enter the market, making the industry more profitable for them, but pricier for consumers.

New trade relationships would need to be formed with the costs to cross the channel for mainland European holidays becoming more expensive.