If insurers are forced to provide cover for all, prices will go up for all, a financial group has warned.
The government's new Equality Bill could have the effect of pushing up insurance premiums across the board, the Fair Investment Company (FIC) has warned.
Minister for equality Harriet Harman announced the proposed legislation last week, which includes a raft of measures designed to combat age and gender-based discrimination. These include making the upper age limits currently imposed by insurers on people in advanced old age illegal.
However, FIC says that scrapping the limits - and effectively forcing insurers to offer cover where it would otherwise not have been offered - could have the effect of putting prices up for all. This is because all insurance is predicated on risk, and greater overall exposure to risk through covering older people leads to greater overall costs.
James Caldwell, director of FIC, commented: "The proposed legislation means that insurance companies will have to re-structure the way they offer policies. They will no longer be able to impose an upper limit when it comes to life and travel insurance, despite there being more risk associated with older consumers. Another insurance product that will be affected as a result is car insurance - companies will no longer be allowed to charge young male drivers more for their car insurance, despite the fact that they are statistically proven to have more accidents."
He added: "If the legislation comes into effect, consumers who are classed as low risk by insurance companies will find themselves hit by increased bills as a result. Insurance companies will be forced to pass the extra cost onto consumers as they will not have the same income as they used to from high risk drivers."
