Study: Women pay up to $118 more than men for car insurance — even with a perfect record

Introduction

Drivers may know that women and men pay different prices for their car insurance. But who does — and who should — pay more?

Rating factors are characteristics like age, gender, credit, driving history and more that insurance companies use to predict how likely a driver is to get into serious accidents and price their policy accordingly. The Insurance Information Institute claims that since women tend to get into fewer and less serious accidents than men do, all else being equal, women should pay less for insurance.

However, recent research has shown that on average, women actually pay more than men. It gets even more complicated after factoring in age. While teenage boys pay more and are more dangerous drivers than teenage girls, middle-aged women pay more but are less dangerous drivers than middle-aged men. For state governments, this raises the question: If the price women pay for car insurance doesn’t reflect their level of risk compared to men, should gender be banned as a rating factor?

New research from The Zebra examined insurance rates by gender, age and location, and found that:

• Women can pay up to 7.6% more than men, depending on their age and location.
• Men are riskier drivers and file more claims than women, but women are 37-73% more prone to injury in car accidents.
• Seven states now ban gender as a rating factor in car insurance.

Women can pay up to 7.6% more than men, depending on their age and location

Contrary to the popular belief that men pay more than women for car insurance, in 2021, women pay 0.4%, or $6, more than men as a nationwide average. However, rates and insurance laws differ from state to state, so how much women pay relative to men depends on where they live.

It also depends on how old the driver is. Insurance customers may be aware that teenagers pay a steep price for car insurance, and teenage boys even more so. In fact, insurance for teenage boys costs $4,909 on average, whereas insurance for teenage girls costs $4,237 — a whopping 15.9% difference.

What customers might not know is that middle-aged women (ages 30-59) also pay more than men of the same age:

In fact, it’s thanks to these middle-age price differences that women pay that 0.4% more than men on average. According to the Federal Highway Administration, there are tens of millions more female drivers aged 30-60 than there are male drivers aged 16-29.

And while the national average shows women paying just 0.4% more than men, a female driver can pay a lot more than a man her age, depending on how old she is and where she lives. In Louisiana, for example, women in their fifties pay $118, or 5.6%, more than men their age. In Oregon, women in their thirties pay 6.5% ($91) more than men of the same age, and women in their forties pay 7.6% ($104) more.

Men are riskier drivers and file more claims than women, but women are 37-73% more prone to injury in car accidents

Another reason consumer advocates are concerned about women paying more for car insurance than men is that men are significantly riskier drivers than women, no matter how young or old they are. Insurance pricing is complicated, but one major aspect is how the customer drives and how likely they are to get into a crash.

That being the case, it seems like men should pay more on average than women. According to the Bureau of Justice Statistics, men and women get tickets and warnings at about the same rate. But when it comes to the most dangerous driving behaviors, men have a clear lead. The Insurance Institute for Highway Safety’s data shows that regardless of age, male drivers consistently account for 68-70% of all driver crash involvements, and men make up 70.5% of all driver deaths. About 79% of drunk drivers involved in fatal crashes are men, as are about 79% of drivers in speeding-related fatalities.

A recent analysis from the Insurance Institute for Highway Safety showed that women are 20-28% likelier than men to die in a car accident (on a per-accident basis) and 37-73% likelier than men to be seriously injured. They found two reasons for this: First, that women are often drivers in the struck vehicle in crashes; and second, that women tend to drive lighter cars than men.

However, this still doesn’t fully explain why women pay more than men for car insurance. One medical or personal injury claim only increases insurance rates by 0.63% on average, whereas speeding, drunk driving and at-fault accidents raise rates by much more.

Seven states now ban gender as a rating factor in car insurance

States are increasingly interested in making sure that their insurance laws aren’t unfair to women with good driving records. In the past two years, California and Michigan joined five other states — Hawaii, Massachusetts, Montana, North Carolina and Pennsylvania — in banning gender as a rating factor (a characteristic insurance companies use to judge their customers’ risk). 

Women pay more than men for car insurance in 21 states and the District of Columbia, and how much more they pay varies. That number is down from a high of 27 states in 2018, but still more than the 12 states in which women paid more in 2016. 

The amount by which women pay more than men varies, too. In 2016, men paid 0.52% more than women, whereas in 2019 women paid 0.68% more than men. The fact that the price women pay relative to men fluctuates so much concerns consumer advocates, and in California, it was one of the reasons why gender was banned as a rating factor in 2019.

Michigan’s ban, on the other hand, was part of a larger legislative change in 2020 that drastically reduced the number of rating factors insurance companies could use to price policies, and how they could use them. Specifically, Michigan banned a number of personal rating factors, like gender, marital status, level of education and homeownership, on the basis that many consider those rating factors to be unfair.

California’s legislative change has had little effect on insurance prices in the state. Prior to the ban, men paid $1,815 and women paid $1,817 annually for car insurance. Now, both pay $1,822. Michigan’s law has had a larger effect, but that’s due more to the fact that it changed the level of coverage drivers were required to have than it is to the fact that it leveled the playing field between men and women.

Tips for drivers

So why do women pay more for car insurance than men? Unfortunately, the answer is that no one knows for sure. While a driver’s gender is outside of their control, there are a few things they can do to save money on their car insurance:

• If gender-based pricing seems unfair, try usage-based insurance. Usage-based insurance is priced only on how and how much someone drives. On average, opting for it saves drivers 3% on their car insurance, which in many cases is larger than the difference between men and women’s premiums.
• Drivers should get to know what goes into their insurance rate. Each state determines what rating factors insurance companies can use to price insurance policies. While drivers can’t control certain factors (like age or gender), they can optimize others, like credit score, good driving and how long they’ve been insured to get the best price possible.
• Parents should make sure their teens are getting every discount they can. Teenagers can qualify for discounts for getting good grades, taking a defensive driving course, staying claim-free for as long as possible and more. 

Methodology

Between September and December 2020, The Zebra conducted a comprehensive auto insurance pricing analysis comprising data from insurance rating platforms and public rate filings. The Zebra examined more than 83 million rates to explore pricing trends across all United States ZIP codes and Washington, D.C.

Analysis used a consistent base profile for the insured driver: a driver of variable age and gender driving a 2016 Honda Accord EX with a good driving history and coverage limits of $50,000 bodily injury liability per person/$100,000 bodily injury liability per accident/$50,000 property damage liability per accident with a $500 deductible for comprehensive and collision.