Why Do Women Get Lower Auto Insurance Rates?

Posted in Auto Insurance , Save on Auto Insurance

June 17th, 2009

Like many things in life, auto insurance is just not fair. Just as some people statistically earn more money than others for doing the same job, other groups of people are considered less risky to insure, and therefore get the best auto insurance rates. When it comes to auto insurance rates, women have an easier time finding cheap auto insurance than men do. This is because of the statistical basis that is used to determine insurance risk: the actuarial model.

Determining Insurance Premiums

Using the actuarial model, your auto insurance company compares you to various members of your “cohort” to assess the likelihood of you getting in an accident. Certain cohorts such as males under 25 are considered more likely to get into an accident, based on statistical evidence that has been gathered by insurance companies over the years. According to the actuarial data assembled by insurance companies, women get lower rates because they get into fewer accidents, and are less likely to exhibit risky driving behaviors than their male counterparts do. Therefore, women tend to qualify for the best auto insurance rates and have lower insurance premiums than men.

Because many high risk cohorts of drivers (men under 25, for example) are male, it may appear as though women are getting a “discount” on car insurance. But in fact, as men age their insurance premiums will become comparable to those of women. There are other things that both men and women can both do to lower their insurance rates.

Credit History an Important Factor

Not many people are aware that your credit history will always have a huge impact on the rates you pay. That’s because auto insurers will use it to judge your responsibility levels and apply that principle towards your insurance coverage. Don’t know what’s on your credit report? It’s easy to just check your FREE credit report and score so that you can fix up any dings to your credit – it’ll help you save big in the long run. A good credit history will go a long way for any other large purchases you make as well.

For the men out there, don’t be too jealous of lower rates for women. You might find out the hard way that lowering your car insurance premium might come with a different price.

And ladies, the next time someone makes a comment about “women drivers,” don’t lose your cool and cut him off in a fit of road rage. You’ll be laughing all the way to the bank with lower auto insurance rates and huge savings on your auto insurance policy!