Why are premiums based on age? Is that allowed?

An employer faces a problem if they specify in a job posting that they are looking for a man or a woman. Or if a gay man or lesbian is rejected because of their sexual orientation, that is quickly considered discrimination. The situation seems to be different when it comes to insurance. What’s the story?

Can car insurance premiums be higher based on age?

Young drivers up to age 24 often pay higher premiums. People aged 75 and older, for example, can no longer take out new insurance policies with certain insurers. This smacks of discrimination, but the insurers frame it differently. They make this distinction because statistics show that these age groups are more likely to file claims. They therefore pose a greater risk to the insurers. This is permitted. Insurers have the freedom to set their own premium policies. For example, they may offer a discount on auto insurance to policyholders between the ages of 25 and 65.

If you file a complaint about the insurer’s policy, the insurer will likely not accommodate your request. You can then file a complaint with Kifid, but you can, of course, also take the matter to court. Keep in mind, however, that a lawsuit is an expensive undertaking. The costs will exceed several years’ worth of car insurance premiums.

It's unlikely that we'll be able to prove discrimination

Insurers do indeed make distinctions, but they claim they can justify them. Young drivers up to 24 years old file more claims on average. You could say they’re already being penalized for their inexperience because they have few or no claim-free years. Due to their limited driving experience, they’ve also accumulated fewer discounts for claim-free driving. For some insurers, this isn’t enough. They also charge a higher premium. They can also justify denying car insurance to older drivers.

You can take on an insurance company, but you can also just cut your losses. There are dozens of insurers where you can insure your car. If one offers a premium that’s too high, just choose another insurer. The same goes if an insurer turns you down. With just a few clicks, you can compare dozens of insurers to find the car insurance that best suits your needs.