Remember Jake from State Farm? Here's the whole story.
Online Auto Insurance is a company that has conducted studies and analysis previously on the factors that can cause differences between the premiums for auto insurance policies. In the past they took the same auto insurance policy over a period of 12 months in the state of California and compared the prices based on the age of the applicant and the insurance companies. Their latest study wants to show if there are any differences in pricing for men and women. According to their findings, it is true that in California male drivers will have to pay higher premiums than female drivers.
Studies Provide Proof
While most people do not believe that gender should be a determining factor in the costs of an auto insurance policy, it is undeniable that there is a difference between how men and women drive. Specifically, men tend to be more aggressive behind the wheel and form more dangerous and risky habits that are likely to lead to accidents. A study conducted by the US Department of Transportation in 2008 showed that men had an accident rate that was 37% more than women. However, more disturbing is the fact that the rate at which male drivers were involved in fatal crashes was almost 200% more than the rate for female drivers, so it looks like gender can be a determining factor in the safety record of a motorist.
When OAI did their analysis they took the same insurance policy that had both comprehensive coverage and collision insurance for an average car, the Toyota Corolla LE from 2009. Then they applied this policy to both men and women in nine different categories, based on the age of the drivers. In order for gender to be the only variable in the policies, the same four insurance providers were used and the profiles of the drivers were free of traffic violations or any road accidents. According to their findings, the policies were not only more expensive for men than they were for women, but the extra cost ranged from just $66 to a staggering $1,480. The premiums were also higher for male motorists, averaging an extra 20% increase in price, which amounted to $630.
Younger Men Are Most Effected
While the policies were more expensive for all male drivers, the biggest difference was noticed in the 18 year old bracket and the smallest difference was for the 35 year old drivers. For male teens, an average premium can be 30% more expensive than it is for their female counterparts.
Steps Being Taken
It is obvious that gender has an impact on the price of an auto insurance policy. Whether this is right or not is up for debate. Other states such as Hawaii, Pennsylvania, Michigan, Montana, Massachusetts and North Carolina have banned auto insurance companies from setting the price of their policies based on gender.
Not so long ago California joined the club of states that are trying to level the playing field. The regulation they issued is called the “Gender Non-Discrimination in Automobile Insurance Rating Regulation“. Here’s our article that explains in-depth how it works and what the predicted results of it are expected to be.