Gender disparity in car insurance premiums – who pays more?

Gender disparity in car insurance premiums – who pays more? | Insurance Business America

Gender disparity in car insurance premiums – who pays more?

Gender is often one of the factors car insurance companies consider when determining premiums. In general, women pay less than men and the difference is more pronounced among young and inexperienced drivers. This gender disparity, however, closes once motorists reach a certain age. From that point on, male and female drivers are more or less on equal footing.

How does gender impact car insurance rates?

Consumer websites have already conducted numerous studies comparing quotes from different car insurance providers to find out what impact gender has on premiums and there has been a prevalent finding – that age influences the insurance cost gap between genders.

Because a person’s age correlates with driving experience and the risk of getting involved in an accident, young drivers often pay the highest auto insurance rates.

Read more: America's top car insurers in 2022 – a region-by-region breakdown

In its most recent pricing analysis, insurance comparison website The Zebra compared more than 83 million auto premiums across every ZIP code in the US, using a 30-year-old male driver of a Honda Accord with full coverage as a sample profile. The firm then adjusted the driver profile differently, based on common pricing factors, which include gender and age.

The site found that for most age brackets, annual car insurance rates for males and females are almost the same, with women paying $1,480 per policy, just slightly higher than the $1,470 that men shell out. Premiums for young drivers, however, tell a different story, with younger male motorists paying 14% more a year for coverage compared to their female counterparts.

The table below shows how much auto insurance premiums cost for teens and drivers in their 20s for both genders based on The Zebra’s analysis. Figures are up to date as of August 2022.

Age

Annual premiums for female drivers

Annual premium for male drivers

16

$5,969

$6,701

17

$5,014

$5,634

18

$4,483

$5,064

19

$3,486

$3,963

20

$3,189

$3,602

21

$2,891

$2,596

22

$2,416

$2,654

23

$2,478

$2,280

24

$2,169

$2,340

Source: The Zebra

A separate analysis by consumer financial website ValuePenguin, meanwhile, shows how the price gap narrows as drivers age. The firm used data from Quadrant Information Services to compare rates for male and female drivers in Indiana, with all sample drivers purchasing a full coverage policy on a 2015 Honda Accord. All details are also up to date as of August 2022.

Age

Annual premiums for female drivers

Annual premiums for male drivers

Percentage difference

17

$4,618

$4,946

7%

24

$2,159

$2,277

5.5%

32

$1,831

$1,846

1%

65

$1,364

$1,401

3%

Source: ValuePenguin

Why does car insurance cost more for men than women?

The answer to this question is that it all boils down to risk. Statistically, male drivers are more likely to get involved in accidents than female motorists. Figures from the Department of Transportation’s Fatality Analysis Reporting System (FARS), for instance, show that men account for 72% of all car crash deaths in 2020 – the latest data available.

Read more: Revealed - the most and least expensive states for car insurance in 2022

Men also typically drive more miles than their female counterparts and are more likely to practice risky driving behaviors, including speeding, driving while under the influence (DUI), and not wearing safety belts, according to the Insurance Institute for Highway Safety (IIHS).

However, not all states allow auto insurance providers to use gender as a pricing factor. California, Hawaii, Massachusetts, Michigan, Montana, North Carolina, and Pennsylvania prohibit insurers from factoring in gender when calculating premiums.

What other factors impact car insurance premiums?

While gender clearly has an impact on auto insurance rates, it is not the biggest factor dictating car insurance prices – that title goes to driving history.

In ValuePenguin’s analysis, an at-fault accident drives up auto insurance premiums, regardless of gender, by a whopping 48% on average. For female drivers, annual rates go up from $4,618 to $6,854 after an at-fault collision, while premiums for men rise from $4,946 to $7,320.

Other factors that influence the cost of auto coverage include marital status, residence, the car’s make and model, and credit score.

Read more: Does car color impact auto insurance rates?

How can motorists save on car insurance premiums?

Regardless of gender, motorists can employ a range of practical strategies to cut auto insurance costs. Here are some of them:

1. Comparing auto insurance rates

Because each driver’s profile and circumstances are different, there is no single insurer that can provide the cheapest quotes for everyone. Because of this, the most effective way for motorists to find the lowest rate possible is to compare car insurance rates. The internet is replete with insurance comparison websites that are easily accessible to drivers. Some of these platforms also recommend motorists to consider local and regional insurers as these often have higher customer satisfaction ratings and offer less expensive policies compared to large players.

2. Taking advantage of discounts

Car insurance providers offer a range of discounts, which motorists can take advantage of to reduce their annual premiums. Drivers can often avail of these through:

  • Bundling of auto policies with homeowners’ or renters’ insurance
  • Insuring multiple vehicles in a single policy
  • Maintaining a clean driving record
  • Paying premiums in full instead of monthly instalments
  • Installing security and safety features
  • Taking defensive driving courses
  • Being a member of professional organizations or affiliate groups
  • Maintaining good grades for students

3. Skipping unnecessary coverage

Auto insurance companies offer a range of coverage options that impact how much premiums will cost. Consumer financial websites suggest ditching the unnecessary coverage so drivers can cut rates.

4. Keeping a clean driving record

Maintaining a clean driving record is among the best ways motorists can access affordable car insurance rates. Safe driver discounts vary between insurance providers but usually, motorists can access between 10% and 25% reduction in premiums for adopting safe driving practices.

5. Maintaining a good credit rating

In most states, insurers use a person’s credit score in calculating premiums. According to the Insurance Information Institute (III), this is done because there is a correlation between a driver’s credit rating and the chances of filing claims.

Read more: What motorists need to know about their auto insurance score

6. Raising the deductible amount

A higher deductible means motorists will pay lower premiums. However, this also increases the amount they need to pay before their auto insurance picks the tab, so policyholders should make sure to keep the value at a level that they can afford.

 7. Checking out the insurance costs when buying a car

Some cars are more expensive to insure than others. For motorists looking to save on car insurance costs, experts recommend checking out sedans, vans, and other family-friendly vehicles as these often have the lowest premiums.

Read more: Revealed – the most and least expensive cars to insure in the US

8. Switching to usage-based or pay-per-mile insurance

According to consumer websites, enrolling in a usage-based insurance (UBI) program is beneficial for drivers who log fewer than 10,000 miles every year. This is often done with the insurer installing a telematics device in the vehicle. This device, also called a black box, tracks driving behavior, allowing motorists to access discounts based on when, how well, and how much they drive.

9. Using public transportation

Using mass transit reduces how much a person drives their vehicle, which may also have an impact on premium prices.

10. Shopping around when it’s time to renew

Car insurance rates change often so that companies can stay competitive and get new customers. Because of this, it would be beneficial for motorists to review their policies every time it renews, so they can get the best coverage that fits their current needs at the cheapest price.