Why Do Women Pay Lower Car Insurance?

I couldn’t believe my ears when my insurance agent first told me.

The year was 2006, and I was in the process of buying my first car. After agreeing to a price with the dealer and arranging a car loan, I just had one more step to do, and that was get insurance.

Long story short, I was quoted more than $2,000 annually for insurance. It wasn’t so much the price that shocked me -- since I had done my research beforehand -- but rather what the agent said to me afterwards.

“Did you know” he said, “that you’d be paying about $500 a year less if you were a woman?”

I was shocked. It wasn’t that I cared women got cheaper insurance, as long as I got it too. But it wasn’t happening.

Why exactly do women pay less? Let’s take a closer look.

Better drivers

While my experience of paying 25% more for the same insurance compared to a woman is an outlier, according to Insureye, the average auto insurance policy for a woman is about 5% less than the average man’s policy.

That’s not a huge difference, but enough that it’s noticeable. So why exactly are women getting a better deal?

The explanation is pretty simple. It turns out that women are, on average, slightly better drivers than men. They drive slower, are less aggressive, and when they do get into an accident, they have lower claim amounts than the average male driver.

There are other, secondary reasons why women pay less. Generally, when men and women go anywhere together, men tend to drive. That means women are collectively driving a little less than men, which automatically makes them safer. It’s hard to cause an accident from the passenger seat.

Think about your experiences during family road trips as a kid. If they were anything like mine, Dad drove while Mom shouted at everyone in the back seat to shut up.

It’s more than just driving

When buying other types of insurance, it’s still better to be a woman. Women, on average, pay 8% less for home insurance, and a whopping 25% less for life insurance in Canada.

The life insurance differential is pretty easy to explain. Women live, on average, more than five years longer than men. And since they’re safer drivers, they’re less likely to die while driving, which is a major cause of death for young men. Additionally, women are less likely to commit suicide.

The house insurance difference is a little harder to explain, but readers should note the difference shrinks to virtually nothing in Ontario, Canada’s most populous province.

It turns out that women do spend less than men on just about every form of insurance, but there’s a pretty good reason for it. It’s because they’re far less of a risk. So unfortunately for the guys reading this, it looks like we’re stuck paying the higher rates until we collectively become safer.

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