How Gender Affects Auto Insurance Rates
The Effect of Gender on Car Insurance Rates
Car insurance companies take a look at many factors to determine how much risk they'll face when insuring you (meaning how likely they are to pay out a claim on your behalf). These include:
- Your car's make, model, and year.
- Your driving record.
- Your credit history.
- Your age.
In addition to the above, a major factor that gets weighed when an auto insurance carrier determines your rates is your gender. This is given particular attention when you are a very young driver (see “How Age Influences Car Insurance Rates" below).
The Pricing Gap
Starting from the time they begin driving, women generally pay less than men do for car insurance. This pricing gap is influenced by:
- The types of cars typically chosen by men.
- The frequency of accidents among women versus men.
- Gender-based statistics on risky driving behavior.
- The average number of miles driven by women vs. men.
Why Women Pay Less for Car Insurance
Auto insurance companies calculate their risk when they determine your premium.
Calculating risk means using historical data to make an educated estimate of the likelihood of a covered person being in an accident.
The statistics tend to show that as a group, women are less likely to:
- Get into a car accident.
- Commit moving violations, like speeding and driving under the influence (DUI).
- Buy cars that are more costly to insure.
- Drive as many miles as the average male driver.
For the reasons above, car insurance for women is typically cheaper than it is for men.
The Numbers Behind the Rates
While gender-based car insurance may seem biased, the following statistics provided by the Insurance Institute for Highway Safety (IIHS) help explain why gender is a rating factor for car insurance:
- 71% of all car accident-related deaths in 2012 were males.
- The number of drivers who died in a fatal car accident was 50% higher for men than women in 2008.
- Men are much more likely to have been under the influence of alcohol in a fatal crash. In 2012, 38% of fatally injured male drivers had BACs of over 0.08%, as compared to 20% of fatally injured female drivers.
- Seat belt use was observed in 88% of female front seat occupants, as compared to 84% of male front seat occupants.
- In 2012, 23% of male drivers who were involved in fatal accidents were speeding at the time of the accident, while 14% of women involved in fatal crashes were doing the same.
Since risk exposure is a large part of an insurance premium, women can generally expect to pay lower premiums than men.
NOTE: If you have a poor driving record with a high history of claims, however, you will still present a high risk to your insurer—regardless of your gender—and pay a high car insurance premium.
The Influence of Age in Car Insurance Premiums
Age can be a significant factor in the difference in insurance rates. In a lifetime, women pay less for car insurance than men do. The major difference, however, stems from the difference in risk between female and male drivers in their youth.
The car insurance premium for young women is at its highest when they are between 16 and 24 years old, but for young men they are much higher.
While auto insurance companies calculate that women in this age group are more likely to exercise unsafe driving habits and get into accidents than older women, they find that men in this same group are still much more likely to:
- Have accidents.
- Cause fatalities in accidents.
- Commit moving violations.
The difference in the risk assessment between men and women in this age group is so big that it account for most of the lifetime difference in insurance costs between men and women.
As drivers reach 25 years old, their risk goes down, as insurance companies see them as more mature, settled, and safe on the roads. At this point, rates tend to begin evening out among men and women. However, because men statistically exercise more aggressive or unsafe driving habits, they may still pay a somewhat higher rate than women.
Options for Male Drivers
If you're a man, you may have to face that you'll probably be paying a higher premium than your female counterpart. However, remember that you can always comparison-shop for the best possible car insurance rates.
Also remember that having a clean driving record and driving safely will go a long way toward getting cheap car insurance rates. If you have a great driving history, you'll pay a lower premium than a female driver with a poor driving history.
Amanda Lautieri Limited Lines Auto Agent