Health insurance is much more regulated than other types, so I would not be surprised if health insurance companies are forbidden from taking sex into account when setting premiums. Male health insurance customers also subsidize non-pregnancy related OB/GYN coverage for females.
Jukaal,
Perhaps you’re being screwed when it comes to vehicle insurance but you’re more than being compensated in the arena of medical insurance where women pay much more than men with much less coverage offered.
There’s a special place in hell for actuaries, in the room with all the lawyers that take on frivolous lawsuits
There has been mention made of mathematicians, statistics, and actuaries; but nobody has yet touched on rate-setting (or “rating”) in insurance.
Rating is the process of establishing a rate that makes sure that claims paid out to a class of driver do not exceed premium collected from that class–essentially ending up saying something like “in order to collect enough premiums to pay the claims incurred by males under 25, we need to charge that class $1.00 premium per every $100 of worth of the car. To cover the claims of females over 40 living in rural areas, we need to collect $0.50…” And so on.
Premiums go into a pool from which claims are paid, but who incurs the accidents that claim a large portion of the pool? If that group takes the most from the pool, shouldn’t that group put more in?
I’m not saying I agree with the practice of classifying auto insurance by driver sex, age, location, and experience; and car make, model, and age; or that that it’s right or wrong, but it is an attempt to make things fair, in the sense that people are charged premiums proportional to the likelihood of making a claim.
Thus, young males are charged more for auto insurance because the insurer needs to be able to cover the cost of accidents incurred by young males. Similarly, city-dwellers tend to be charged more than country-dwellers, simply because there are a lot more things (cars, pedestrians, buildings) to get into accidents with in the city, and proportionately more claims are made by city-dwellers.
Your claim of “sexist” may be a valid one, but you might also want to cry “ageist,” “locationist,” “driving record-ist,” “model-of-car-ist,” and a whole bunch of other “-ists,” because they are all factors. Indeed, rates are set using a number of factors, but they all come back to who incurs the claims, and how much do they cost, and what must be charged to cover their cost.
I suppose it would be possible to forget the statistics and actuarial data, and establish one single class of driver covered by insurance. But then, it would still be seen as unfair: the good driver who has twenty years of accident-free driving would end up paying for the 18-year-old’s accident claim, while the 18-year-old would have no incentive, (in the form of future discounts for accident-free driving) to improve his or her driving skills.
Anyway, I’ve given a very brief and simplistic overview of the rating process, using nice round numbers that may or may not correspond to the amount of real rates. There are specific mathematical formulas used for rating, and your insurance broker or an insurance underwriter could probably explain it better than I can here and now.
Oh I know that women get there part of being “screwed over” as well with rates, which isn’t right either. I was just pointing out the auto-insurance one as that is the one that most applies to me. Insurance all together seems to have a lot of flaws in the theory…
Not like I’m going to try and change it, was just wondering in my OP if i was missing something as to why it was done this way.
Just a slight nitpick with friedo’s definition of stereotype and that it requires a false premise.
Stereotypes may be false or cobbled together without evidence, but the definition does not require it.
This is borne out by the first part of the Webster definition (which you excluded) which states: “something conforming to a fixed or general pattern.”
I am not going to get very involved in this discussion (I have said everything I need to say in the thread mentioned by Sailor), but I think the most fair way to do it would be to make the premiums of people that drive recklessly go up to make sure that the claims of the reckless drivers do not exceed the premiums collected. A “reckless driver” would be someone who incurs a moving violation (speeding, reckless driving, DUI, etc.), or is involved in an accident.
The insurance companies would determine how much and for how long the premiums would go up. That way they can still make as much money as they do now, but the burden of reckless drivers would be paid for by the people that make the claims.
Rates should be standardized. If this results in a woman’s rates being increased to match a male’s, so be it. Hell, that even benefits the insurance company.
Also, Stereotypes aren’t necessarily false; I don’t know how you came to define said word as such.
The important thing to remember is competition. No insurance company can afford to unilaterally disregard valid underwriting criteria, because they would be instantly undercut by companies that used the criteria. Imagine that Company A decided to charge male and female drivers the same amount. This amount would be somewhere in between the old male rate and the old female rate. What this means is that hordes of males will instantly sign up for this company’s policies to get the lower rates, while hordes of females will desert the company in favor of others that charge the lower female rate. This will change the percentage of male/female, and will force the company to raise its overall rates. This will cause even more females to desert the company. Eventually, the point will be reached at which the company’s enrolment is almost exclusively male, and the company’s rates will be about the same as the male rates of other companies. Nothing gained.
Nothing to do with the evil actuaries - sorry, guys.
The only way to go about it is if by law all companies were barred from using gender as an underwriting criteria. This is analogous to the situation in healthcare in some areas, as previous posters alluded to.
What is true is that there is a lot more pressure to change to unisex rates in areas that favor males (e.g. pensions) than there is in areas that favor men. But that’s just political reality.
It may be worth noting that while women have less accidents they aren’t necessarily safer drivers as has been claimed several times. This seems to only be true for young women vs young men. As ages increase it appears that per mile accidents are about the same. But men drive more miles than women.
OK, Not an expert here but I’ve been told that the female/male (auto insurance) thing has been around since cars were insured. A friend of mine, who sells insurance, told me that to get women to actually DRIVE cars, they lowered the rates, thus marketing insurance to women. Over the years, statistical information has shown that women are just as susceptible to men when on the road. But, the “gold” standard had been set thus the way insurance is billed today. Pay to play my friend.
This may be anecdotal (and thus cannot be used as evidence in a court of law;)) but most of the women I know have been pulled over for traffic infractions just as often as men…they just get out of the ticket more often than men, i.e., the “verbal warning.”
I myself have been pulled over only twice in my driving career; once I got a ticket, and once I didn’t.
Insurance companies may be sexist, but so are cops. It’s unfortunate that one leads to the other.
There’s a flaw in your logic here, friedo. Giving an example of a stereotype which is false does not have any bearing on the question of whether falseness is a necessary condition of a stereotype.
Whether or not you wish to use the word stereotype, the moral argument against treating an individual as if he partakes of the perceived character of his category, holds, whether the perception is true or not. To take your example, even if it were proven to be true that Jews were on average greedier than gentiles, it would be wrong to treat an individual Jew accordingly.
I’m sure most women are more susceptible to men. Gays make up a fairly small percentage of the population. 
Seriously though, that is not correct:
www.soc.hawaii.edu/leonj/499ss98/ welicky/GenderDiffs.html
It seems the EU is attempting to remove sex differences in auto insurance.
It’s an interesting question (more suited to GD I would think).
Where do we draw a line here? If statistics showed that Negroes were statistically more likely to have an accident than Caucasians would it be legal to slug them an extra fee as well?
Again, no cite because I’m too lazy/at work to look for it…
I did see some stats on Males under age 25. They were responsible for a huge % of the accidents. I remember looking at the stats and wondering why they were allowed to drive. I can see why Males under 25 have huge insurance bills.
I don’t begrudge the actuaries that set these rates based on the data. What I dislike is the obvious sexism of society saying that it is ok to base rates on gender when it favors females but not ok when it favors males. If that is political reality, I hope the backlash is intense and longlasting.
Ok, I’ve learned a bit here about how the companies detrmine risk and cost, so I apologize for my earlier remark about actuaries.
Didn’t get a chance to read the whole thread, but I have always been told that it’s not because females are “safer” drivers per se, but because males tend to do silly things with cars - like drag race, drink and drive (who drives on a date? Usually the guy) and others. And because of this, they tend to have more costly wrecks - in terms of damage to cars and medical bills. That’s why males are charged more. I’ve also heard that “day in, day out” males are safer drivers, but this is negated by the “hey ya’ll - watch this!” stunts that guys pull.
Ok, I ran over and asked our pricing actuary about this. He says that this is only true because the more costly wrecks make a more costly bottom line. Rates for sex are based on freqency rather than severity. Right now it’s just a matter of losses paid/premium earned. However, with advances in technology they’re able to study this more easily and it would be possible to “weight” it more because of the severity. However, he also says that loss experience and rates for young females are rapidly catching up to rates of young males
Huh? I’ve been on several different health plans and I’ve never seen where women pay more or are offered less coverage.
So some plans charge blacks more than whites? None that I’ve ever been part of.
This is extremely unlikely, for reasons noted in my previous post. Were this the case, at least one enterprising company would start offering a unisex rate, midway between the male and female rates. They would be deserted by females (on whom they are losing money anyway, according to your theory), but would capture an enormous share of the market for males, and would make money hand over fist. All other insurance companies would be forced to follow suit.
You’ve made some sort of error here. In particular, your third and fourth sentences contradict each other. What you (or your pricing actuary) probably mean to say is that rates for sex (& all other rates) are based on both frequency and severity. And that while men may be comparable (or better) to women in terms of frequency, they are worse in terms of severity, which makes them more costly overall.
This is in line with Rex Fenestrarum’s post, and also in line with studies such as the one linked here
Just a tidbit - in a college class recently, someone gave some stats indicating that men drive an average of 12,000 miles per year vs. 5,000 miles per year. I would think (in my non-insurance knowledgeable mind) that this particular statistic would impact insurance rates. No, I have no cite, but I may be able to e-mail him and get one.