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® Joel Ohman

UPDATED: Apr 8, 2022

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Insurance Q&A: “Why is car insurance cheaper for women?”

Before we get started, it’s important to point out that car insurance is not always cheaper for women than men.  There are many factors involved in how car insurance rates are determined that can result in a woman paying more than a man. We’re just looking at a trend in insurance premiums.

For example, a young woman with a poor driving record and an expensive sports car may pay more for identical coverage than a mature man with a great driving record and a good insurance score.

However, all things being as equal as possible with regard to insurance rating factors, women do tend to pay less for car insurance than men.  The reason behind this is similar to the reason insurance is more expensive for a teenager than it is for an adult.

For starters, women tend to have less frequent and less severe accidents than men.  The term frequency refers to the number of accidents a group of people have within a given time frame.

Additionally, aggressive driving, including multiple lane changes and tailgating, are driving habits more commonly associated with men.  This is not to say women aren’t capable of it, they simply don’t do it as often, statistically.

Men also tend to have more severe accidents than women. Insurance companies use the term “severity” to describe the overall amount of money paid for an insurance claim. Speeding is the leading factor in the overall severity of an accident. Physics tells us that the faster you are driving when you hit something, the greater the damage. A clean driving record, especially as you age goes a long way. But each insurance company calculates insurance premiums a little differently.

To sum it up, insurance companies charge more money to groups of people who force them to pay out more money in claims over time.  Not only does this make good business sense. Each state has a Department of Insurance that regulates the insurer’s rates to make sure they are fair and non-discriminatory.

While I understand it is common for us to believe that car insurance companies are out to take us for every possible dollar, just like any other business, they are really trying to charge the lowest rate possible to attract as many customers as possible.

Can insurance agents get men and women lower rates?

One of the benefits of working with a qualified agent to find your insurance policy is you have a professional on your side. There’s no guarantee you’ll pay less. But an agent can look for discounts and see where you can get comprehensive coverage without being penalized for things like a low credit score. They can help you find the auto insurance company that makes sense for you.

Tip: It’s a good idea to shop your insurance rate to ensure you get the best coverage at the lowest possible rate, regardless of whether you are a man, woman or teenager.