Do Women have cheap car insurance rates?
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UPDATED: Mar 13, 2020
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Women pay less for insurance, especially in the younger age groups. Is this gender discrimination? Alternatively, is it justifiable? Insurance companies rely on complex methods to calculate car insurance premiums, and account for many other factors besides gender. However, each insurer places a different weight on certain factors, and a driver’s gender may carry significant weight depending on which insurance company she chooses.
Women and Car Insurance
Insurance companies drive their premium calculations by numbers, and according to accident fatality statistics, things look better for females than they do for males. According to data assembled by the National Highway Traffic Safety Administration, overall traffic fatalities have decreased each year for the past five years. The bad news for men is that they accounted for 70 percent of all traffic accident fatalities in 2009.
Age also plays a part in insurance rates, in addition to gender. In all age groups above 15 years old, males have a higher accident death rate in car crashes than females, according to statistics reported by the Insurance Institute for Highway Safety.
There is also speculation, although unproven, that female personality traits such as risk aversion, desire for fairness, unwillingness to negotiate, and a desire to accept lower payouts sooner rather than wade through red tape for a riskier chance at a higher payout create less expense for insurance companies and may place females in lower premium categories.
Men tend to engage in riskier driving behaviors and generally drive more aggressively, drink more, drive more miles per year, and drive without wearing a seatbelt more often. All of these behaviors increase the risk of being involved in an accident, which raises premiums.
However, according a research team at Johns Hopkins Schools of Medicine and Public Health, part of the reason men seem to fare worse in accident statistics is because of the methods for analyzing data. When statistics on female crash fatalities use the number of crashes per million miles, and annual average miles driven per driver, the numbers start to get closer together. Statistics usually only consider fatalities and accident rates. The results showed teenage boys have approximately 20 percent more crashes for each mile driven than female teenagers. Males and females in the 20-to-35 age bracket have about the same number of crashes per mile driven, and over age 35, females actually showed a significant increase in crashes per mile driven over males.
Do Car Insurance Companies Favor Women Drivers?
The debate seems to be heating up about women’s insurance rates and whether males are suffering from gender discrimination in insurance. According to new legislation in Europe, insurance companies have unfairly charged young men higher prices since on average they have higher incomes than women do, rather than anything based on accident or other driving-related statistics. A ruling goes into force in December 2012, which will remove the ability of insurance companies to use gender information when calculating insurance rates for their customers. Debate continues in the European Union on whether the outcome makes sense, on the basis that statistically, males still have a greater chance of dying in a car accident than females.
Primary Insurance Rate Factors
Women may theoretically have lower car insurance premiums, however, many other factors determine rates besides gender. For example, the state a driver lives in plays a part in determining her car insurance rates. Each state sets its own insurance limits and legal requirements, which causes premiums to vary by state, sometimes substantially.
The type of car a woman chooses to drive can have a significant effect on premiums that overrides any discount given for being female. This goes both ways, since minivans and some SUVs are the least expensive cars to insure, and many women drive these cars. Conversely, women do drive sports cars as well, and luxury sport coupes can cost $1,000 to $2,000 more per year in insurance rates than a minivan.
Secondary Insurance Rate Factors
Whether male or female, driving history factors into drivers’ insurance rates as well, and every point on their record pushes insurance rates higher. Some violations add more risk than others in the eyes of insurance companies, however, even one point from a minor traffic violation causes the insurer to see drivers as higher-risk. DUIs and a penchant for fast driving are not uniquely male, and if a female driver has a DUI, an excessive number of points, a license suspension or a cancellation from a previous insurance company, these additional items could dramatically increase her insurance rates as well.
The California Department of Insurance provides a tool to estimate insurance costs based on a “theoretical person” profile. When running the tool for a male and female separately, the results came out as follows: Based on a driver profile for full coverage insurance, (liability plus comprehensive and collision), licensed 16 to 40 years, driving 7,000 to 10,000 miles per year, clean driving record (no points), driving a Honda Accord and living in Irvine, CA. The premium comparisons for a few of the larger insurance companies follow:
- 21st Century: $1,332
- Geico: $1,525
- State Farm: $1,427
- AAA: $1,409
- Esurance: $1,408
- 21st Century: $1,272
- Geico: $1,501
- State Farm: $1,427
- AAA: $1,407
- Esurance: $1,368
Since each insurance company uses its own internally developed statistical models to calculate premiums, and chooses which risk factors to focus on the most, it appears some companies may weight gender as more important than other insurers do, in the state of California.
What is the Average Annual Cost of Car Insurance?
All gender issues aside, annual insurance costs vary between states regardless of who the driver is, and according to a car insurance premium index assembled by Carinsurance.com, the average insurance nationwide comes out to $1,433 per year. To illustrate the range between states, the lowest-cost car insurance states are Iowa, at $690 per year, and Vermont at $901 per year. The highest insurance premiums exist in New York and New Jersey, at $2,703 and $2,347, respectively.
Cheap Car Insurance for Women
Finding cheap insurance is much easier, and takes less time, than it used to thanks to the Internet. Many companies offer free quotes on their websites, with some available in less than six minutes. Additionally, other sites such as Esurance.com provide quotes for several companies to make searching for the right insurance policy even more efficient. Some of the larger insurance companies, such as Allstate, offer information on their websites regarding discount opportunities, how to qualify for them, and provide a rate calculator to run scenarios with different drivers and various discounts.