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Gender Bias in Car Insurance

Gender bias in car insurance has historically been the topic of some debate and more than its share of curiosity. The contention that men pay more than women do for car insurance is a hot topic in some circles. Some of the alleged reasons behind this supposed disparity are accurate and some not so much. Gender bias in car insurance is a real issue, but one maybe not as clear cut as some might think. It is useful and instructive to take a closer look at this topic to find out more and get a better feel for some of the reasons behind the prices we pay for our auto policies.

Men Pay More for Coverage

Before going any deeper into a discourse on the issue of gender bias in the auto insurance industry as it pertains to the rates paid by customers, it is necessary to lay out one basic fact, a fact upon which many build their argument on this particular topic. Men do indeed have a greater tendency toward both auto accidents and auto insurance claims in general than do women. This fact is solid, indisputable, and proven beyond doubt through decades' worth of research. The simple fact that men get into more car accidents would seem to show that they are a greater risk to insure than are women. This, in fact, is a basic position adopted by many who defend the practice of gender differentiation in auto insurance pricing.

But the singular fact that men historically have been more likely to get into car accidents and to file claims on their auto policies has a very simple explanation, one that defies the thesis of those who would use that fact to defend the higher rates men pay. That explanation is simply this: men historically have done a lot more driving than women, so they have had many more opportunities to get into accidents and claim situations in the first place. In the early days of the automobile, it was very rare for a woman to learn how to drive at all. As time went by, women learned to drive when it became necessary to do so, such as if they became widowed or their husbands were away at war and they had to go to work in the factories or elsewhere.

More years continued to pass and with them, women's driving habits kept evolving. More women went to college and thus moved out of their parents' homes prior to getting married. More women likewise entered the work force upon the completion of their schooling rather than simply staying at home and raising their children while their husbands worked. Today, the trends continue to change as more men choose to stay at home and raise children while their wives go out and work outside the home and serve as the primary breadwinners in households with young ones. As women's driving habits continue to change, so too do their accident and claims rates.

More Driving Means More Accidents

The more often you are on the road, the more likely you are to be involved in a car accident. That much is indisputable. For anybody male or female, increased road time means increased exposure to risk. This is true over the course of a single day: if you drive for several hours straight, you will encounter more traffic, weather, and other obstacles to safe driving than if you were only in the car for a few minutes. Also, the driver becomes a safety hazard after being behind the wheel for too long. When you drive for a long time in one trip, you get tired and begin losing your concentration and your ability to react.

Long drives home in rush hour traffic at the end of the work day are a frequent location of accidents in which driver fatigue was a major causative factor. As women drive more often and longer, they become involved in more of these types of accidents, and a greater number of car accidents overall. For this reason, as time goes by, the issue of gender disparity in auto insurance pricing becomes less of a concern. Or so you would think.

It is true that as the years pass, the distance in average auto insurance premiums between men and women of equal ages driving the same types of cars narrows. The primary reason for this is the way women have caught up with men in terms of average time on the road per person per year. But there is still a gap, even in cases when all other variables are equal. The reason for this brings back the old fundamental question: is it fair to surcharge men for their auto insurance simply because they are men?

Men Display Aggressive Driving Tendencies

Even if one were to line up a man and a woman of equal age and equivalent past driving records, and try to put them both into an auto policy on the same car, more than likely the man would pay more for that policy. This is true even in spite of the specific evidence pointing to that man's past driving being just as safe as the woman's. Taking a look at the reason behind this is instructive because it helps to understand the way auto insurance premiums are determined in general.

That particular man in this hypothetical case study pays a gender surcharge for his policy not because of any particular behavior he himself has displayed behind the wheel, but because of his membership in a demographic which has displayed certain behaviors as a whole. The historic tendency of male drivers to drive more aggressively, to speed more often, to display road rage more frequently, and to generally fail to abide by the rules of the road more often than women cost that particular man on his policy, even if he has never shown any of those tendencies.

How is this related to auto insurance pricing in general? Insurance providers only have so much data to go by on each individual driver. They know your age and gender and all that basic information. They may have a listing of the things you've been caught doing behind the wheel such as speeding tickets or accident reports, but they do not have cameras in place in your car watching your every move. Thus they have to make indirect inferences about the risk of insuring you as an individual driver based on how you measure up in certain broad risk categories. The reason men pay more than women as a general rule is the same reason teens pay more than middle aged adults as a general rule. Any individual teen might mot ever get into an accidents, but they are statistically more likely than any other group to do so; likewise, an individual man may not drive aggressively or speed on the freeway, but his insurer has to regard him as a threat to do so based on historical data.

Do men get shortchanged when it comes to auto insurance pricing? In answering this question, one must consider what alternative there is for the industry aside from indirect risk assessment.

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