How does age and gender impact your car insurance?
Auto insurance rates are based on a number of factors, including where you live and previous claims history, the make and model of your car, and your coverage requirements. But did you know that your age and gender also play a role in determining auto insurance rates?
The gender insurance gap
In Ontario, Alberta, and the Atlantic provinces, men paid 27% to 22% more than women for auto insurance. If that seems discriminatory, consider these research findings: Men under the age of 25 are three times more likely to be involved in a road collision and account for 73% of all road traffic deaths.
Additionally, men make up 87% of fatal injuries while drunk driving.
Given these statistics, most insurance providers consider male drivers to be “riskier” to insure, thus the insurance rates to cover male drivers tend to be higher.
British Columbia, Saskatchewan, and Manitoba do not factor in the gender of the driver when determining auto insurance premiums. Collisions or claims eventually lead to higher premiums and drivers with traffic tickets or collisions end up paying more in these provinces too.
Do drivers get better with age?
Similarly, there are statistical records that points to high risk associated with young drivers. Collisions are the leading cause of death among 16- to 25-year-olds, with impaired driving factoring in 55% of those collisions.
Young drivers are also charged more for auto insurance rates. Insurance companies charge a high premium for the risk to insure inexperienced or less experienced drivers. That’s why a 23-year-old will be seeing higher premiums than someone who already has 15 years of driving experience and history.
In Ontario, a young driver with less than three years of driving experience is likely to see an annual premium of $5,214. And premiums decrease as the number of years that they drive increases.
Did you know?
In a Supreme Court of Canada case from 1992 titled Bates vs. Zurich Insurance, a young, single, male driver alleged that having to pay higher insurance premiums solely because of his age, gender and marital status was a discriminatory breach of the Human Rights Code.
Ultimately, The Supreme Court of Canada ruled that the insurance industry could continue to use age, gender, and marital status to assess risk due to statistical correlation and a lack of practical alternatives. However, in their ruling, it deeply encouraged the industry to seek other, less discriminatory ways to set insurance premium rates
With telematics or Usage-based insurance (UBI) data now more commonplace than ever before, who knows what changes could be coming to these risk ratings in the future?
How to reduce your auto insurance premiums
While you don’t have any control over factors like age and gender, there are certain things you can do to reduce your auto insurance rates.
- Get yourself listed as a secondary driver. If you’re a relatively new driver, you can list yourself as a secondary driver, who uses the car occasionally. It helps lower your auto insurance costs and build driving history before you purchase your own auto insurance policy.
- Complete a driver’s education course. Ontario’s Ministry of Transportation offers driver’s training courses. Upon completion of the ministry-approved course, many insurance providers offer up to 30% discount on insurance premiums. It is worthwhile checking with your insurance company to see if you are eligible for this discount.
- Consider usage-based insurance. With telematics and UBI, drivers are rewarded for good driving habits. Whether you are a recently licenced, young driver or someone with several years of driving experience under your belt, you could benefit from UBI as most insurance providers offer up to 30% discount on insurance premiums if you demonstrate good driving behaviour.
Someone who is perceived as riskier to insurance companies because of their age and gender alone won't have to pay high insurance premiums forever. Ultimately, being a safe and careful driver is more important than who you are and when you were born.
The best way to ensure that you are getting the lowest rate for auto insurance is to compare rates from multiple providers.
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