Shuman Roy is an entrepreneur, business owner, and musician. He started RoysNoys, LLC in 2013 as a music production and education service company. He also offers small business consulting and advisory services to help businesses get from start-up mode to turn-key operations. Shuman earned his M.B.A from the Stern School of Business in 2001 and has an undergraduate degree from Manhattan College in ...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Joel...

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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Jul 19, 2021

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Insurance Q&A: “Are insurance rates lower for females?”

There are a lot of insurance myths floating around out there.

As a result, it can be tough to filter everything we hear about insurance to determine what’s accurate and what’s plain ridiculous.

Fear not, TTAI is here to cut through all the noise and help you out with this one.

The Lowdown on Gender and Insurance

When it comes down to it, insurance rates tend to be lower for females than males.

We’re assuming the ladies are satisfied with this answer and the gentlemen don’t believe it’s so, ahem, “fair.”

With the harsh (for some) truth out of the way, let’s explore the “why.”

It’s a good idea to read up on how car insurance rates are determined to understand the basics if you’re not already familiar.

But let’s look at this particular one in detail.

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A New Era of Insurance

Gone are the days where everyone pays the same amount for an insurance policy.

Insurers have focused on developing rates that accurately reflect our individual risk as a way to improve their bottom line.

The ultimate goal is to attract the drivers with the lowest chance of filing an insurance claim and offer them the cheapest possible insurance premium.

The opposite is true of drivers who are more likely to file a claim during their policy term.

[Top 10 car insurance companies]

Remember, even a small claim can greatly exceed a couple years worth of paid premium dollars, despite it never feeling that way as the one paying it.

Keeping that principle in mind, consider the information below that explains why men pay more than women when it comes to car insurance rates.

Stats Don’t Lie

If you present a higher statistical chance of filing a claim (thereby costing the insurer more money), you pay more for insurance. Pretty simple.

On the flip side, you pay much less if you aren’t “risky” to insure.

Insurance companies are data hounds. They collect every imaginable detail (that’s not discriminatory) about us and review it constantly for changes.

As you may have guessed, males have a higher numbers of tickets and accidents than females.

The gap is widest for the youngest age range, which explains why car insurance for a teenager is so high, especially a male teen driver.

All other factors being equal (requested liability limits, type of car, age, etc.) men can expect to pay more for insurance.

Final Word

While it might seem unfair or even discriminatory to charge males more for car insurance, it’s really just data.

As noted, insurance companies are in business to make money, and ideally large profits.

If they know they’re going to have to pay out more claims for a certain subset of drivers, they will need to charge more to ensure they aren’t losing money in the process.

Whether you’re a male or a female, if you think you’re paying too much for car insurance, shop for insurance quotes online and/or speak with an independent insurance agent who can shop your profile with several insurance companies at once.

There’s a good chance a better deal awaits you.

(photo: Fidelio)