Why do men pay more than women on car insurance? Insurance underwriting is a principal factor that governs auto insurance rates for men and women who are looking to buy such insurance. Insurance underwriting, a process by which the insurance company ultimately decides whether a person will be offered or declined coverage, scrutinizes a variety of information provided by you, the applicant.
Factors that Affect Auto Insurance Rates
Other factors that will make a difference in the cost of auto insurance include make and model of the vehicle to be insured -for example, sporty vehicles with powerful engines and minimal safety features carry higher claim risks- as well as a driver's geographic location and vehicle usage. Highly populated cities and suburban areas with a lot of traffic tend to experience more accidents than areas with minimal traffic, so persons living in congested areas tend to pay more for car insurance. Those living in high-theft neighborhoods may also see higher vehicle premiums.
Why Do Men Pay More Than Women On Car Insurance?
Two factors - age and gender - which are also important to the underwriting and rating process and clearly impact auto insurance rates, are obviously beyond a driver's control to manage. So, why do men pay more than women on car insurance? As several studies have shown, male drivers are said to have twice the possibility of being involved in fatal auto accidents compared to female drivers, and they also rack up more traffic violations. This data has propelled insurance companies to conclude that males have riskier driving habits than females and are much more likely to be involved in traffic accidents, which translates into higher insurance premium costs.
High Risk Drivers
Even when allowing for the tendency that there are male drivers on the road than females, study after study has supported the conclusion of insurance companies that male drivers carry a higher risk. According to TrafficStats, a risk analysis study by Carnegie Mellon for AAA in 2007 found that men have a 77% higher risk of dying in an accident compared to women.
The study, which used information from the Fatality Analysis Reporting System (FARS) and the National Household Travel Study, estimated fatalities per 100 million trips to be 14.61 for men and 6.53 for women. The study quotes the total number of traffic fatalities between 1999 and 2005 as 175,094 for men and 82,371 for women. Further, the Insurance Institute for Highway Safety (IIHS) found that 14,512 male drivers died in 2007 compared to 5,865 female drivers. This explains in part why do men pay more than women on car insurance.
Age and Your Insurance
Add the factor of age into the mixture and premiums costs tend to escalate even higher for male drivers. Cited in the Carnegie Mellon study is a statistic which indicates that young men ages 16 to 23 are four times more likely to be in a fatal accident that the average driver. A lack of driving experience and personal maturity are noted as possible reasons for this high rate of accidents as compared to other driver categories, and thus answers the question of why men pay more than women for car insurance. Statistically, drivers between the ages of 50 and 65 have the safest driving records. However, once a male driver reaches the age of 25/26, insurance premium rates begin to drop if no other major changes have occurred concurrent to reaching this benchmark, such as if the driver moved, switched vehicles or had a recent accident.
Data that has been tracked and analyzed in comparing gender driving records indicates that the tide may be starting to turn slightly more favorably for male drivers. Data taken from the U.S. Department of Transportation's FARS shows that male vehicle driver deaths have seen a recent decline since 2006. As a matter of fact, when stretching the gender driving rates of a greater time period, the rate at which male motor vehicle crash deaths has declined (-19 percent) is substantially greater that the decline of female motor vehicle crash deaths (-10 percent) according to FARS (data compared from 1975 through 2008).
Should this trend continue into the future, there is a possibility that the insurance industry will be propelled into a position to take a second look at its underwriting and rating analysis and strategies, with an eye toward equalization of rates for male and female drivers.