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Car Insurance for Women

Written by Todd Clay. Posted in Research Last Updated: 11/08/2010

Why auto insurance is cheaper for women and how companies rate different groups of drivers

Young woman in car

Will she really pay less money for car insurance than her brother?

Like it or not, women are charged different rates for car insurance than men.

That said, throw any negative preconceptions you may have about women drivers out the window. All things being equal, car insurance for women is less expensive than men.

Why is that?

Statistically speaking women are involved in fewer accidents. Ask any insurance actuary – the person responsible for setting premium rates.

Why Premiums Are Different for Women

Though it sounds like insurance companies are discriminating against men, rest assured they are not. Companies favor or punish different groups based on cold, hard statistics alone.

Here’s how it works:

Every insurance company employs at least one actuary. This is a person with a mathematics background who analyzes losses incurred by that company. They also determine if any particular group of drivers are causing more or fewer claims than others. The company then bases its premiums based on the actuary’s study.

It is important to note that insurance companies only consider their own loss experience when compiling these numbers – with only a passing interest in what their competitors are doing. What’s more, different companies place a different emphasis on different outcomes.

For the most part pretty much every company comes to the same basic conclusions: drivers under 25, as well as drivers over 74, cause a disproportionate amount of claims. In addition, women cause fewer claims then men. Thus, car insurance for women is cheaper than car insurance for men – though the rates don’t vary wildly.

The Gender Gap In Rates

The gender gap in insurance is most apparent at the high school ages. While insurance for a teenage girl is still expensive, it’s not as expensive as it is for her brother or boyfriend.

However, by the time she turns 25 rate differences between her and her male counterparts tend to level off. By the 50s rate differences between men and women are often negligible, but even at that age there are still differences in the woman’s favor.

Insurance is fundamentally a business of statistics. While by definition these statistics drive the business and prefer some groups over others, no reputable company will prefer or discredit anyone based on anything else.

When it comes to car insurance for women, the buying and servicing process should be absolutely no different for them than it is for men. If it is, you should probably take your business elsewhere.

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Todd Clay

Todd Clay is a former insurance agent with the largest insurance company in the United States. He earned his Bachelor’s from the University of Texas. He’s worked in several fields but has specialized in insurance, financial-related information, and technology. He blogs at Car Insurance Guidebook.

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