Woman Car Insurance – Do Females Really Get Lower Rates?
Reader question:
Why is a woman car insurance coverage much cheaper than that of a man?
Allen
It is only for a certain period of time, Allen.
There is a period in a young person’s life when driving is new and risk is high, among both genders. I can tell you from experience driving with male and female friends who are young and only have had their driver’s license for a few years, that none of them are bastions of driving talent. I can also say that between me and my husband, we’re both insurance and probably should be forced to travel on bicycles for the safety of humanity. Okay, don’t get scared; I’m kidding. However we, as well as many others, are in that age group under twenty five where car insurance companies decide that you need to be charged so much more because of the high risk factor. Funny thing is, his half of the premium is more than mine.
The reason that men end up paying more than the woman car insurance premium, typically, is because not only do they fall into the young high risk car insurance policy holders group, but the group of young males is high risk as well. This is called big numbers rating, which means that the insurance company is determining how much you pay based on the rate that people in your demographic make car insurance claims. While most car insurance companies glean this information from their own data and are won’t to have different results when it comes to things such as more expensive vehicles and areas, the under twenty five male is pretty much a global pariah of the insurance biz. That doesn’t mean you won’t be able to find good car insurance coverage like a woman car insurance buyer would. It just means that it will cost about two hundred percent more than it would if you were female.
You might be wondering why you are getting punished for a claim you never made. Yes, it is true that even if you have a record for driving and motor vehicle insurance claims that is squeaky clean, you will still end up pying more into the system based on the group that you are a part of, even if that squeaky clean record does take some of the edge off of it. The reason for this is that the car insurance companies aren’t the police. They can’t charge you after you’re guilty because if they did then they would go out of business instantly. The amount that you would receive in the event of a bad accident and a claim is often a lot more than the amount that you pay into the system with your car insurance premium. The car insurance company that you are with needs to cover that difference.
So what you end up getting is a system in which people are separated into different groups, and all are throwing their money into a big pool. The pool needs to equal the same amount of money, but not everybody can give as much as everybody else because you can’t penalize someone who only drives five hundred miles a year for the claims of someone who has three DUI charges. So, the people who have fewer risk factors end up throwing less into the pool than those who have more risk factors, and anybody can retrieve money from the pool, so long as their car insurance claim is approved. That’s how the system works.
Cheers,
Fashun Guadarrama.
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