Gender disparity in car insurance premiums – who pays more?

Gender disparity in car insurance premiums – who pays more?

How does gender affect car insurance rates?

Consumer websites have already done several studies comparing quotes from different car insurance providers to see the effect of gender on insurance premiums, and there has been a prevalent finding – that age influences the insurance cost gap between the sexes.

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

Read more: America’s Best Car Insurance Companies in 2022 – District by Region

In its latest pricing analysis, insurance comparison site The Zebra compared more than 83 million car premiums across every US zip code, using a 30-year-old male driver of a Honda Accord with full coverage as a profile model. The company then adjusted the driver’s profile differently, based on common pricing factors, which include gender and age.

The site found that for most age groups, annual car insurance rates for males and females are about the same, with women paying $1,480 per policy, slightly higher than the $1,470 paid by men. However, the youth driver premiums tell a different story, with young drivers paying 14% more annually for coverage than their female counterparts.

The table below shows the cost of car insurance premiums for teens and drivers in their 20s for both genders based on The Zebra’s analysis. Figures are updated as of August 2022.

age

Annual premiums for drivers

Annual premium for male drivers

16

5,969 dollars

$6701

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 USD

22

$2,416

$2,654

23

$2,478

$2280

24

$2,169

$2340 USD

Source: The Zebra

Meanwhile, a separate analysis by consumer financial site ValuePenguin shows how the price gap narrows with age in drivers. The company used data from Quad Information Services to compare rates for male and female drivers in Indiana, where all drivers purchase a sample full coverage policy on a 2015 Honda Accord. All details are also updated as of August 2022.

age

Annual premiums for drivers

Annual premiums for male drivers

percentage difference

17

$4,618

$4,946

7%

24

$2159

$2,277

5.5%

32

1,831 USD

1,846 USD

1%

65

$1,364

1401 USD

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 taking risks. Statistically, male drivers are more likely to be involved in accidents than female motorists. Figures from the Department of Transportation’s Death Analysis Reporting System (FARS), for example, show that men account for 72% of all motor vehicle deaths in 2020 – the latest data available.

Read more: Revealed – the most expensive and least expensive car insurance in 2022

Men also drive more miles than their female counterparts and are more likely to engage in risky driving behaviors, including speeding, driving under the influence (DUI), and not wearing seat 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 insurance companies from taking gender into account when calculating premiums.

What other factors affect car insurance premiums?

While gender has a clear impact on auto insurance rates, it’s not the biggest factor that dictates auto insurance rates—this title goes to driving history.

In ValuePenguin’s analysis, a mishap increases car insurance premiums, regardless of gender, by a whopping 48% on average. For female drivers, annual rates rise from $4,618 to $6,854 after a crash, while premiums for men rise from $4,946 to $7,320.

Other factors that influence the cost of automatic coverage include marital status, residency, vehicle make and model, and credit score.

Read more: Does car color affect car insurance rates?

How can motorists save on car insurance premiums?

Regardless of gender, motorists can use a range of practical strategies to lower their car insurance costs. Here are some of them:

1. Compare car insurance rates

Because each driver’s profile and circumstances are different, there is no single insurance company that can offer the cheapest rates for everyone. For this reason, the most effective way for motorists to find the lowest possible price is to compare car insurance rates. The internet is full of insurance comparison websites that drivers can easily access. Some of these platforms also recommend motorists to consider local and regional insurance companies because these often have higher customer satisfaction ratings and offer less expensive policies compared to the big players.

2. Take advantage of discounts

Auto insurance providers offer a range of discounts, which motorists can take advantage of to reduce their annual premiums. Drivers can often take advantage of them by:

  • Collect car policies with homeowners or renters insurance
  • Insurance of several vehicles in one policy
  • Maintain a clean driving record
  • Pay the full installments instead of the monthly installments
  • Installation of security and safety equipment
  • Take defensive driving courses
  • Be a member of professional organizations or affiliated groups
  • Maintaining good grades for students

3. Skip Unnecessary Coverage

Auto insurance companies offer a range of coverage options that affect the cost of premiums. Financial websites are suggesting consumers to forgo non-essential coverage so drivers can cut fares.

4. Maintain a clean driving record

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

5. Maintain a good credit rating

In most states, insurance companies use a person’s credit score in calculating insurance 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 making claims.

Read more: What motorists need to know about the degree of their car insurance

6. Increase the deductible

A higher discount means that motorists will pay lower premiums. However, this also increases the amount they have to pay before auto insurance opts for the tab, so policyholders must make sure the value is kept at a level they can afford.

7. Checking insurance costs when buying a car

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

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

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

According to consumer websites, enrolling in the Usage-Based Insurance (UBI) program is beneficial for drivers who log fewer than 10,000 miles each year. This is often done when the insurance company installs a telematics device in the car. 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 car, which can also have an impact on premium prices.

10. Shop when it’s time to renew

Car insurance rates change often so that companies can stay competitive and acquire new customers. For this reason, it will be beneficial for motorists to review their policies every time they are renewed, so that they can get the best coverage that suits their current needs at the cheapest rates.

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