Find Out How Gender Affects Car Insurance Rates

The European Union (EU) passed a resolution prohibiting insurance companies from using as a factor the gender of the applicant in determining insurance premiums. Prior to this resolution, it was common knowledge that insurance companies the world over differentiate the insurance premiums based on gender and age group.

For example, males from 20 to 30 years of age tend to have higher premium payments than women within the same age group. Basically if you are male and your age is between 20 to 30 then your premium payments are higher by around 10% than women of the same age group. Why the differentiation. Simple, based on statistical data men of the abovementioned age group tend to be involved in more accidents and tend to file more insurance claims than women of the same age group.

You might say that the EU has no jurisdiction over me because I live in a different nation or state, well you are wrong. Rulings such as this may not form part of the jurisprudence of another nation but it is indicative of a trend against gender discrimination by insurance companies. This trend coupled by the current worldwide trend against of gender discrimination is sure to give rise legislation as well as jurisprudence worldwide.

Implication on Men 20 to 30 Years of Age

How does this affect you as an individual car owner? Based on statistical data as well as news reports, if gender is removed from the equation then insurance premiums for the male population should decrease significantly especially for those who are between the age of 20 to 30. An average of 10% decrease is expected for this age group. Men from other age groups will also see an average of 6% decrease in premiums thru the adjustment process.

Implication on Women 20 to 30 Years of Age

Gender discrimination is something that has no place in society and is generally frowned upon by women the world over. But in this case, the removal of gender as a factor in determining insurance premiums will have women reeling since their insurance premiums are expected to increase around 15% to 25% depending on their age group.

Why the significant difference between the percentages increase of insurance premiums for men and women. Simple, statistically speaking there are significantly more male drivers than female drivers. Therefore the percentage decrease and increase between men and women will not be equal.

For example, under gender discriminatory premium schemes if there are 20 male drivers charged $14.00 a month and there are 10 female drivers charged $10 a month, removing gender in the equation of insurance premium computation should see a 10% decrease in male premiums thus lowering the premium amount to a little over $12. Insurance companies will recoup the amount lost by requiring women drivers to shoulder the amount loss and increasing their premiums to be equal to that of male drivers. In this example, because the number of male drivers is twice the amount of female drivers (in this example) then they have to shoulder the added burden, which means a 20% to 25% increase in their premium payments.

While Waiting for Legislation, Jurisprudence and Application

For women, knowing this should already put them on high alert so they can plan accordingly. Also, it would be wise to try to lower insurance premiums thru other means. Here are a few tips and techniques for lowering insurance cost:

1. Never miss a scheduled check up and keep the receipt in order to prove you had the check up made.

2. Always check your oil and water level.

3. Only use original parts and if necessary, only have automobiles serviced by registered or certified services.

4. Read your coverage and drop some coverage that does not really apply to you. For example, if you live in a mountainous area, then flood related insurance coverage is useless so drop the coverage and negotiate for lower premiums.

5. Add on coverage that you actually need. This may increase your premiums but it is still worth it considering the risks. For example, your state experiences tornadoes and snow storms annually, then add on additional coverage for snow and other calamities for added protection.

6. Ask for a discount. More often than not, all it takes to get a discount is to ask for one.