Auto Insurance

Why do men pay more for car insurance?

By: Jessica Mach on March 5, 2018

Men — they pay less for razors and deodorant, but there’s still one area where women are getting a better deal: how much they pay for auto insurance.

That’s right, men tend to pay more.

Why? To understand the logic behind this phenomenon, it’s necessary to explain how insurance companies come up with auto insurance rates in the first place.

As with any type of insurance, auto insurance is tailored to each individual customer. That means that Driver A and Driver B, who might have similar driver histories and live in the same neighbourhood, can walk into an car insurance company at the same time to get a policy, and still walk out with completely different bills.

Auto insurance companies rely on a number of factors to determine how much to charge each driver. Some of these factors are unique to you (your driving record), some are related to your car (model, age, fuel type, and price), some take into account your neighbourhood (how many accidents tend to take place there? How often does car theft happen?), and some are based on demographics (your age, gender).

A look at the factors

What concerns us today is demographics. When it comes to this factor, insurance companies are looking at the accident rates of the groups to which you belong, and will take those rates into account when determining how much they should charge you.

And when it comes to gender, the evidence is a little damning. Studies have shown that men are more likely than women to speed, more likely to get into accidents (the Ontario Ministry of Transportation found that between 2005 and 2014, twice as many men died in car accidents than women in the province), more likely to drive while under the influence of drugs or alcoholic, and less likely to wear seat belts (okay).

This is why men get charged higher premiums. In Ontario, every auto insurance company takes gender into account when determining their customers’ rates, a spokesperson at the IBC confirmed to LowestRates.ca on Monday.

Is it discriminatory? 

Of course, many people have argued that it is unfair to men with clean driving records to pay more for insurance, based on mistakes they themselves did not make. The European Union agrees: in 2011, the European Court of Justice banned gender-based on all insurance products. The court ruled that it discriminated against men and went against “fundamental rights.”

Since the ban went into effect, however, the gap between what men and women pay still hasn’t closed: as a matter of fact, it may have even widened, according to a report in the Telegraph last September.

“The [European Court of Justice’s] directive removed the ability of providers to give default discounts to women; however, the statistics and risk models used by insurers mean that the result is largely the same,” John Miles, of U.K. price comparison website comparethemarket.com, told the Telegraph.

Insurers now price risk on individuals, and men tend to have worse driving histories.

“This is likely due to a number of factors, such as statistically higher accident rates for men and more men than women driving business and commercial vehicles – which are higher risk.”

Of course, eliminating discounts for women means that men who have good driving histories now have the potential to get rates as low as women do. The bad news is, men, on average, still pay more because they tend to be riskier drivers to insure. 

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