For as long as there has been car insurance, men have paid higher premiums than women. This is not unfair discrimination. It’s based on hard facts. They also make more claims and more expensive claims.
The discrepancy is largest among young drivers, under 25. To keep premiums as low as possible, young male drivers should take driver training, and avoid even minor tickets. Telematics is also an excellent way to prove you’re a safe driver, while saving as much as 25%.
Why do men – especially young men – pay more for auto insurance? Well, the simple answer is that statistically speaking, they’re worse drivers than women. Auto insurance companies keep reams and reams of data on their customers, all the claims they make, how much the claims cost, and who is at fault for each accident. And this data keeps playing out more or less the same story. A young male customer is much more likely to have a major accident and cost the insurer tens of thousands of dollars in costs for car repairs, possible lawsuits, but mostly for injuries.
Insurance prices are calculated using dozens of different variables, so it’s impossible to say “men pay x percent more than women.” To give you a rough idea, here are a few prices we pulled from our quoting system. Although these don’t represent premiums actually being paid right now, they are live quotes that could turn into real policies if the sample drivers we used were real people with the same address, age, vehicle, driving history etc.
|18 years old (under parents’ policy)||$1,035||$496|
|18 years old (standalone policy)||$6,576||$5,099|
|20 years old||$4,644||$4,071|
|22 years old||$3,384||$2,929|
|25 years old||$2,484||$2,448|
|35 years old||$1,930||$1,943|
|45 years old||$1,348||$1,348|
|55 years old||$1,229||$1,229|
As you can see, men pay significantly more as brand new, young drivers, but by the time they turn 25, assuming that they’ve been insured the whole time, the discrepancy in price between genders is basically gone.
Here’s all the data that insurers consider when setting premiums:
Overwhelmingly, the data supports charging young men more. We don’t have access to the detailed data used by the insurance companies, but they have to share it with the provincial auto insurance regulator every time they apply for a rate change.
In terms of publicly available data though, here are a few things to consider:
Gender-based insurance pricing has been controversial not just in Canada, but around the world. The European Union introduced laws in 2012 making it illegal to charge more for auto insurance on the basis of gender. This may change back in the UK once Brexit is all sorted out, but for now, insurers cannot use gender as a rating factor.
Male drivers with clean records who consider themselves just as safe as any female driver say it’s unfair to paint half the population with the same brush. But the fairness debate cuts both ways. Ultimately, insurance companies are going to structure their pricing such that they recover the cost of claims, plus a reasonable profit margin. Overall, if they are forced to charge men less than what their claims costs would indicate, then they have no choice but to charge women more than their claims costs would indicate.
In the UK, when gender pricing was banned, the average woman’s annual premium increased by around £300 ($520 CDN). Some would say that’s not fair to women.
By the time you turn 25 or so, the gender price difference disappears, so the real question becomes, “What can young male drivers do to control their auto insurance premiums?”
There’s quite lot they can do actually:
To be certain, when shopping for a vehicle, call for quotes on different cars you’re considering.
All of these steps should be easy to do – and they will lower your bill and keep you, and others, safer on the road.
No matter your age or gender, get a no-obligation car insurance quote from the insurance experts at Mitchell & Whale Insurance Brokers. Contact us at 1-800-731-2228 or firstname.lastname@example.org. We’d be happy to help you save money.
Want to add to this story? Let us know in comments below! Mitchell & Whale is a fast-growing insurance brokerage in Ontario, striving to make insurance _not suck_ one customer at a time. Give us a call today to discuss any of your insurance needs at 1.800.731.2228.