Why Female Car Insurance is Cheaper?



If there is one thing that most drivers are aware of when it comes to car insurance, it is that car insurance for females is cheaper than it is for males. It is one of the facts that all young men have to get used to when they first start getting car insurance quotes. The reasons for this go to the basics of car insurance, and indeed, all types of insurance.

Insurance is all about risk, and car insurance is no different. When you purchase car insurance, you are paying for the insurance company to take on the financial risk of you having an accident. They will pay for the damage and costs of the accident. This means that the higher the risks of an accident, the more they will charge you for the car insurance.

One of the biggest tasks of all insurance companies is calculating risks. They employ literally hundreds of actuaries who look at statistics and data and use it to calculate the chances of certain events occurring at any given moment. Their statistics, over years of study, have shown that men, particularly young men, are significantly more likely to be involved in accidents than women are. They therefore, charge more for the car insurance premium to cover the fact that they will have to pay out for more accidents from their male customers than from their female customers.

Gender is not the only factor that will be taken into account when calculating insurance premiums however. Insurance companies aim to take as much information as possible into account to make their statistics and predictions ever more accurate and effective. For them, it is simply a question of profits. The more accurately they can assess the chances of each and every one of their customers causing an accident, the better they will be at attracting low risk customers and charging high risk customers according to the risks they represent.

Age is also one of the important factors that insurance companies take into account when calculating insurance premiums. The older and more experienced the driver, the safer they are deemed to be. Also, as drivers get older, the difference in risk between men and women tends to decrease so that, while young men are a lot more likely to be in an accident then young women, older men are pretty much the same risk as older women, or only represent a slightly elevated risk level.

There have been comments from some quarters that this method of pricing insurance is unfair and discriminatory on the grounds of sex/gender. However, since the insurance companies have very scientific methods for assessing their insurance rates, there is nothing arbitrary about their methods and they are deemed by most people, including politicians, industry experts and the public at large, as being justified. While it would be one thing to charge men more for insurance for no reason, it is quite another thing when then whole contract is based on risk and gender can be shown to have a significant impact on the risk. Therefore, despite criticism from young men (especially those with fast cars), it appears as if lower insurance costs for lady drivers are set to continue.

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