GEICO charges women more than men for auto insurance – should it?

GEICO charges women more than men for auto insurance – should it?

GEICO charges women more than men for auto insurance – should it? A consumer group has found that some of the nation’s major auto insurers – GEICO, in particular – actually charge women drivers more for insurance than men.

The study, conducted by the Consumer Federation of America (CFA), puts into question the age-old myth that men are charged higher auto premiums than women. To prepare the report, the consumer advocate compared car insurance premiums for both men and women across 10 major cities in the US, obtaining insurance data from America’s six largest insurers – Allstate, Farmers, GEICO, Liberty Mutual, Progressive, and State Farm.

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CFA found that in 38 instances, women who had spotless driving records were charged at least $100 more per year than men. In six cases, women had to pay $500 higher annual premiums.

“Insurance companies punish female drivers with perfect records far more often than men,” CFA insurance consultant Douglas Heller told CBS News. “Regulators should reconsider allowing companies to continue using it at all.”

Among the individual carriers, GEICO charged female policyholders 83% more than men, at an average $176 annual surcharge. Progressive hikes women’s charges 60% of the time, by comparison.

On the other hand, State Farm charged most male and female drivers with perfect driving records evenly, although younger men pay an average of $488 more for annual premiums than younger women.

“It is widely believed that male drivers, especially young male drivers, cause more, and costlier, accidents,” commented CFA director of insurance J. Robert Hunter. “State insurance commissioners should insist that auto insurers explain why they usually charge middle-aged and older women higher rates than men.”

Hunter told Forbes that a lack of consistency from one insurance carrier to another with regard to who pays what for coverage could be a factor in the disparate costs.

“If sex were an actual risk factor, we wouldn’t see companies using it in such divergent ways,” he explained. “The insurance companies’ use of sex as a rating factor does not seem to reveal much in the way of a consistent risk assessment, and regulators should reconsider allowing companies to continue using it at all.”

Where do you stand on the issue? Should gender be taken into account in insurance premiums? Leave a comment below with your thoughts.


Related stories:
California insurance regulator orders companies to stop discriminatory pricing
Travelers facing discrimination lawsuit
 
13 Comments
  • 10/13/2017 8:52:31 AM
    Another example of discrimination against women. Women generally safer in all aspects of their lives and less likely to take unnecessary risks then men.
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  • 10/13/2017 9:15:13 AM
    Perfect driving record is one thing, but did they consider the credit impact on car insurance rates? If not, that can explain the disparity. Many of those struggling financially are single moms who may have mars on their credit.
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  • Mark 10/13/2017 9:38:17 AM
    Doesn't discrimination require intent? Doesn't calling this discrimination kind of cheapen the word? I hardly think this rises to that level. Since when did anything that is different between men and women become a discrimination issue? This seems pretty simple to me. Doesn't underwriting require some kind of basis for how the rate being charged was arrived at? I agree carrier should have to justify why a certain rate is being charged but discrimination...really?
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