A few friends of mine were discussing why women generally pay lower car insurance rates than men do. No one is really sure why.
The ultimate answer is most likely the fact that based on the actuarial charts, men cost more to insure. But why is this?
I’ve heard two major theories on this:
(1) Men tend to be more agressive and as a result get in more accidents.
(2) Men tend to drive more than women and as a result get into more accidents.
How much do each of these factors figure in? Also, someone said that insurance companies dropped the part where one’s rates go down when one turns 25. Is this true (I’d be rather disappointed, since I just turned 25)?
And why does marriage lower rates? Is it because both parties tend to drive less (since they often times go together rather than separately)? Is it because people tend to drive safer when they have children with them?
Just wondering if anyone out there knows the reasons behind the statistics.
I don’t think the insurance companies are overly concerned with why women have safer driving records than men. It’s just that all the statistics indicate that they do, so they it’s less likely that they will have to pay out a claim to a woman than to a man.
Because women typically work in insurance and want to give fellow women a break.
(Sorry, after reading the posts on the male version of the pill, I couldn’t resist)
The complex formulas that insurance companies use in determining risk are usually trade secrets. Different insurance companies have different rules as far as the “magic age” when premiums go down. Although most insurance companies seem to favor women over men as far as risk liability (and therefore premium costs).
When I worked in insurance claims for three years, I noticed that while men and women had practically equal number of accidents, the more costly accidents tend to come from male drivers. Males seemed a lot more likely to drive while intoxicated and get into an accident. Teenage males can be especially reckless drivers, and it’s no wonder why their premiums are so high.
I have no idea the statistics on married drivers, but I believe the rationale is that a married driver is less likely to be reckless. However it is more likely it is a matter of dividing up the representative sample. You could possibly find that blue eyed males are safer drivers than brown-eyed ones. Though it would be tough for an insurance company to rationalize how eye color makes a difference in premiums to its customers.
I’m a single guy (and HATING it, BTW) and when I hit 30, the rates stayed the same. I asked the agent why didn’t they go down, I thought they were supposed to go down? he said no, if you want them to go down, get married. I hit 40 last year, and they still didn’t go down.
At least that’s how it is at my insurance company.
Hey, I don’t mind paying what I pay, but I’ve always wondered about the legality of all this. What if, for example, stats showed that Asians drove better than whites, or that university graduates drove better than high-school dropouts? Or that African-Americans drive better/worse than white Americans? Can insurance companies seriously base rates on this? Or any silly statistical “fact?”
I know this is not an original line of thought, but I don’t know the answer to this question, so humor me.
I’ve heard a similar (but, strangely, different) theory: Men get in fewer, but more damaging, accidents, while women get in more, but less damaging, accidents. In other words, all the accidents you see in Red Asphalt were caused by men, all the bender-fenders and bumping-into-pole accidents are caused by women. Generally.
Any accuracy to this theory, or is it just another one of those wacky pieces of gossip?
Racial discrimination in insurance is illegal. Why? Because state legislatures say so. Sex discrimination in insurance is generally legal. Why? Same answer.
By the way, I believe that Massachusetts requires insurance co.s to charge the same rates from boys and girls.
So guys save a few bucks on car insurance, and give it right back on their health insurance.