Gender Based Insurance Premiums

Gender Based Insurance Premiums

Gender Based Insurance Premiums – Can An Insurance Company Charge Me More Or Less Premium Based Upon My Gender?

The short answer is, it depends.   It depends on the type of insurance you are purchasing and the state in which you are purchasing it.

Insurers generally have to prove that their rating plans are non-discriminatory and that the rating factors they use have true predictive power. If being a particular gender can be proven to drive different loss outcomes, then a state might allow insurers to use gender as a rating variable.

Male driving recklessly

Gender Based Rating In Auto Insurance:

When it comes to auto insurance, actuaries can show that men, particularly young men, generally have higher loss costs than women. As gender is predictive in this case, most states allow insurers to use gender as a rating factor.   However, a few states do not.   Massachusetts, North Carolina, and Hawaii, for example, prohibit gender as a rating variable in auto insurance.

So what is a young male driver to do?   Well, there are other rating variables that you may be able to control that may impact your cost of insurance:

  • Your loss history and your history of tickets/citations impact your cost of insurance. Driving carefully and obeying all traffic laws will, in the long run, lower your cost of insurance.
  • Credit – your credit score may impact your cost of insurance. Actuarial analysis shows that drivers with poor credit are more likely to have accidents.   Try to take actions to improve your credit score. (Click Here for tips from Experian on improving your credit score.)
  • Good Student Discounts: If you are still in school, most insurers offer discounts to drivers with good grades.   So, study hard. It may lower your auto insurance premiums.
  • Type of Vehicle & Safety Features:   If you are looking to save money on auto insurance, you may want to pass on purchasing that 600 horsepower muscle car. The type of vehicle you buy can impact your cost of insurance. You might also want to buy a car that has advanced safety features.   Some insurers may provide discounts for features like lane departure warning and collision avoidance systems.
  • Parking in a covered/protected area:   Parking in a secure garage reduces the likelihood that you sustain a loss from vandalism, theft, weather, and a number of other causes of loss. If you have access to a secure parking area, you should take advantage of it.
  • Get Married: Most insurers provide significant discounts to drivers that are married. Found the love of your life yet?

Also, age does make a difference.

Why do men have more accidents than women?

Gender Based Rating In Health Insurance:      

Up until the Affordable Care Act went into effect, 42 states allowed gender based rating in health insurance. As women below age 50 generally used more health care than men, rates for women generally used to be higher. The Affordable Care Act prohibits gender based rating in health care, so rates for women and men are now the same.

Gender Based Rating In Other Lines Of Insurance:

For other types of insurance, the legality of insurers charging different rates based upon gender varies by state. Check your state’s department of insurance or department of commerce website to see what your state allows.   (Click Here to use the NAIC’s tool to find the link for your state.)

Other Enhanced Insurance articles related to Insurance Premiums:

Usage Based Insurance (e.g. Progressive’s Snapshot)

Car Insurance Estimators

Cheaper Is Not Always Better

The DWI Conundrum

Are Traffic Cameras Making Safer Streets

Are Insurance Companies Out to Get Me

How Much Does Homeowner’s Insurance Cost

Can My Child Support Affect My Driver’s License

Does the Color of Your Car Affect Your Insurance Rate?

Enhanced Insurance is not written by attorneys. If you’re looking for legal advice, you need to contact a lawyer. Further, insurance practices and forms change constantly and are varied from state to state. For definitive answers in your area, contact a local agent.

While the majority of people want an agent involved in their purchase of insurance, many people want to see if they can save money by buying direct from the insurance company. Others want to try a direct quote to make sure the premium they’re now paying through their local agent is fair. If you want a quote for your coverage, click on the competitive quote button on the right side of this page.

Jim Ketterson is an insurance expert with more than 25 years of experience in the industry. He has served as a President of an insurance company, an insurance underwriter, and has held various roles in insurance company product management. He has his Chartered Property Casualty Underwriter designation and a MBA in Finance. The information he offers in his posts is general in nature and may not be appropriate, accurate, or applicable in all situations. Before making any important insurance decisions, you should seek the advice of a qualified insurance agent and discuss the particulars of your individual situation. Follow Jim on Twitter @MNinsurancePro

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