Gender Discrimination in Insurance – Does It Affect You?

On both sides of the Atlantic, gender discrimination in insurance is something of a discussion point. Insurance policies and rates are determined by actuaries, who look at a wide variety of variables to work out what you should be paying, like where you live and what you do, and quite often gender is one of those variables.

Some historical data shows that women live longer than men for example, and insurers use these kinds of statistics to give lower or higher premiums to people depending on their gender.

Women pay lower premiums as compared to menHowever, in Europe, the EU recently declared this illegal. For years, car insurers have studied statistics and concluded that female drivers are less likely than males to get in accidents or make claims, and so have offered lower premiums for women. Ads have targeted women by describing them as “careful drivers” and there are even insurance companies who only offer policies to female drivers. Whether this is based on hard evidence or the stats have been exaggerated for marketing purposes is debatable, but one thing is for sure: as of 21st December car insurance providers can no longer offer reduced rates to women, and the advertising campaigns targeting them will stop.

Gender Discrimination in Insurance

A major shift:

It is anticipated that women drivers’ insurance premiums will rise to meet men’s, in some cases going up by around £300, or between 25 and 50%. This will obviously require women to plan ahead and budget for the increase. Women are also advised to make sure they hunt around when next renewing their policy – the variables used to determine your car insurance premiums will have changed. So use price comparison sites and do your own legwork to make sure you’re getting the best deal.

While in Europe, women have been saving on car insurance in comparison to male counterparts, women in America are having the opposite problems when it comes to their health insurance, due to gender ratings which favor men.

A report published this year by the non-profit National Women’s Law Center claimed that gender rating results in women being charged significantly more than men for the same policies (even when maternity care is taken into account).

In some cases, they found that policies for women cost around 85% more than comparable policies for men. For example, one plan in South Dakota charges a 40-year-old woman $1252.80 more a year than a 40-year-old man for the same coverage.

How car insurance gender discrimination affects you directly?

Pricing Gap

Right since the start, men have always been asked and required to pay higher car insurance premiums than women. The reasons for this pricing gap are many, some of which include-

  • The type of cars that men are most likely to choose
  • The frequency of accidents amongst women against men
  • Considering gender-based statistics on risky driving behavior
  • The average number of miles driven by women versus men

If you’re still confused by this strange car insurance gender discrimination, the following will tell you exactly why women pay lower premiums than men. Based on reports and statistics:

  • Women are less likely to get into car accidents
  • Violating traffic rules, road regulations and driving under the influence of alcohol are misbehaviors that are most likely to be found amongst men drivers than women.
  • Men tend to purchase costlier cars than women
  • Women are less likely to drive the average miles as compared to men

How male drivers can fight this car insurance gender discrimination fiasco:

Agreed, that as a man, you may not have many options that can keep your car insurance premiums lower than usual. However, you can always compare the car insurance rates and go for something that you can afford. You can always comparison-shop with different providers and choose the car insurance plan that is best for you.

Also, having a clean driving record can take male drivers a long way. As long as you drive right and safe, it will be easier for you to fetch cheap car insurance rates. Also, with safe and careful driving, it gets easier for men to keep their accident count low and the payment of premiums doesn’t arise in such cases.

If a man has a remarkable driving history, he can still manage to pay lower premiums than a female driver with a poor driving record.

In the end:

Many states have banned gender rating already, but a widespread ban won’t come into force until 2014. In the meantime, if your state has not banned gender rating, unfortunately, there is little you can do other than compare plans and find the best for you. If your state has banned gender rating but you believe you are still paying more than a male counterpart for an identical plan due to persisting car insurance gender discrimination, you need to take an action.