Auto insurance and gender
- by admin
There are endless unkind jokes about women and driving. Ask any man and he will give you chapter and verse why he will never left his wife or partner drive him. It’s probably a sign of insecurity. You always make jokes about the things you fear the most. That helps you face the terrible reality which, in this case, is that the statistics tell the story of women being better drivers. Well, perhaps we need to find another word. “Better” could be misunderstood here. Let’s start with the legal framework. Two US states have formally passed laws prohibiting any gender discrimination when it comes to writing insurance for vehicles. Presumably this is to protect men who would otherwise be paying far more than the women. Equality works in both directions. Indeed, a Belgian court case has just arrived in the European Court of Justice posing the question whether insurers may properly take sex into account when deciding the premium rates. If the practice is held to breach the principle of equal treatment between men and women, then it will be revolutionary across Europe. As it is, the fact that women live longer than men is considered when setting the premiums for life insurance, or that women are more likely to seek medical treatment is considered when setting health insurance premiums, and women’s record as safer drivers is considered when setting car insurance premiums.
European and American insurers react with horror if anyone accuses them of gender discrimination. As far as they are concerned they write personal policies based on the personal characteristics of each individual. They deny the premium rates are based on the factor of sex but rather on hard evidence. The European insurers have already said any change in the law on this point will have immediate results with major premium rate adjustments and some products being withdrawn from the market altogether. The only concession to the insurers so far is the suggestion that the judgment will not be made retrospective. The several million auto insurance policies currently in force will not have to be rewritten. This would be particularly important in the life insurance market.
Coming back to the US, the National Highway Traffic Safety Administration confirms the same statistical pattern that women drivers are less of a risk. Equally importantly, they buy less expensive vehicles. Put the two together and you get lower rates. One factor may change this calculation. More vehicles are now being fitted with technology to record how the vehicle is being driven. With pay-as-you-drive policies slowly coming on to the market, this technology may record whether women actually do drive more slowly or are simply better at not being caught. Until this evidence emerges, the American men will continue to pay more for their auto insurance. It’s like a testosterone tax reflecting the insurance industry’s terrible prejudice that men are more aggressive drivers who take more risks when on the road. Our advice to men is therefore to get the maximum possible number of auto insurance quotes in the search for companies prepared to give men with good safety records as drivers as good a deal as that given to women.