Auto Insurance Rates: Gender-Based Differences Across States

Auto insurance rates vary across states and by gender. While men are generally considered higher-risk drivers, women often pay more for auto insurance premiums. This is due to a variety of factors, including historical data, geographic location, and driving behaviour. Some states have banned the use of gender in car insurance pricing, including California, Hawaii, Massachusetts, Pennsylvania, and North Carolina. In these states, insurers must use other factors, such as age, location, and driving record, to set their rates. The national average cost of car insurance for women is $1,340 per year, while for men, it is $1,391 per year.

States where women pay more for auto insurance

In the United States, women pay more for auto insurance than men in most states. According to a LendingTree analysis, women pay more for auto insurance in 37 states, with the average difference being $32. In some states, the difference is much higher, with women in Florida paying $199 more than men, followed by Oregon ($130) and Delaware ($118).

The reason for this disparity is that insurance companies consider women to be higher-risk drivers, resulting in higher premiums. However, this is not the case in all states, as some states have banned the use of gender as a factor in determining insurance rates. These states include California, Hawaii, Massachusetts, Michigan, North Carolina, and Pennsylvania.

In these states that have banned gender-based pricing, women may see their auto insurance rates decrease. For example, in Massachusetts, which has the highest disparity in incident rates between male and female drivers, with female drivers having 17.9 more incidents per 1,000 drivers than males, the average auto insurance rates are the same for both genders.

The debate surrounding the use of gender in auto insurance rates is ongoing, with consumer advocates arguing that the varying rates are unfair and that gender should not be a factor in determining insurance premiums.

States where men pay more for auto insurance

While women generally pay more for car insurance than men, there are some states where men pay more. In seven states, men pay more for car insurance than women, with the biggest gap in Wyoming, where men pay $31 more than women. Vermont and Ohio follow, with a difference of $27. Men and women pay the same amount for car insurance in seven states.

In Wyoming, men pay an average of $1,020 for car insurance, while women pay $989. In Vermont and Ohio, the average cost for men is $1,014, compared to $987 for women. These states have the largest gaps in car insurance costs between men and women.

The remaining four states where men pay more than women for car insurance are:

• Connecticut: Men pay $7 more.
• New Hampshire: Men pay $6 more.
• Maine: Men pay $4 more.
• Rhode Island: Men pay $2 more.

It is worth noting that the gap between the average costs for men and women in these states is relatively small compared to the gap in states where women pay more.

Additionally, the number of states where women pay more for car insurance than men has increased in recent years. In 2016, men paid more in 33 states, while in 2018, that number decreased to 21 states. This shift may be due to insurance companies finding that women are riskier to insure, as they are filing more expensive claims. However, it is important to note that men are more likely to engage in risky driving behaviours and are involved in a higher percentage of fatal crashes.

States that have banned gender-based insurance rates

Several US states have banned gender-based auto insurance rates, with Montana being the first state to do so in 1985. However, Montana repealed this law in 2021, allowing insurance companies to once again use gender as a factor in determining insurance premiums.

The following states currently ban gender-based auto insurance rates:

• California
• Hawaii
• Massachusetts
• Michigan
• North Carolina
• Pennsylvania

In addition, Delaware is considering implementing a similar ban.

These states have taken a stand against using gender as a factor in determining auto insurance rates, recognising that gender is not a reliable or consistent predictor of risk in auto underwriting. By eliminating gender differences in insurance rates, these states are promoting fairness and equality for their citizens.

It is worth noting that, while gender-based auto insurance rates have been banned in these states, insurance companies may still consider other factors, such as age, geographic location, driving history, and credit score, when determining insurance premiums.

How gender-based insurance rates affect young women

Young women tend to pay less for car insurance than their male counterparts. Women aged 16 to 24 pay around $140 to $800 less per year for car insurance compared to men of the same age group. This is because young men under 25 get into more car accidents than young women, and insurance companies set rates based on risk factors.

However, the gender-based advantage for young women disappears around the age of 25, and the discrepancy even moves in favour of men when comparing auto insurance premiums for older people (aged 40 to 60, according to one study). This is because men are more likely to get into accidents, get tickets, and be arrested for driving under the influence. Men are also more likely to drive a car that is more costly to insure.

In the United States, insurance is largely regulated at the state level, and several states have taken the lead in eliminating gender differences in auto insurance rates. These include California, Hawaii, Massachusetts, Michigan, Montana, North Carolina, and Pennsylvania. Montana was the first and only state to ban gender-based insurance rates in any type of insurance, but it reversed this decision in 2021.

In Europe, a 2012 ruling banned the use of gender in insurance ratings, and auto insurance rates are now based on occupation, miles driven, type of car, and other factors.

How gender-based insurance rates affect young men

Young men are affected by gender-based insurance rates in several ways. Firstly, they often pay significantly more for car insurance than their female counterparts. This is due to statistics showing that male drivers are more likely to get into accidents, receive tickets, be arrested for DUI, and drive more miles than female drivers. The difference in rates can be substantial, with male drivers under 25 paying up to $843 more per year than female drivers of the same age. This gap begins to close around age 30 and evens out by age 50.

Secondly, gender-based insurance rates can impact young men's driving behaviours. Knowing that their insurance rates are higher may encourage young men to drive more carefully and follow traffic rules to avoid accidents and tickets. It may also influence their choice of vehicle, as they may opt for a cheaper car to insure. Additionally, young men may be incentivised to shop around for insurance providers who offer lower rates or provide discounts for safe driving records.

Furthermore, gender-based insurance rates can affect young men's access to insurance coverage. In states where gender is a factor in determining rates, young men may struggle to find affordable insurance plans. This could potentially lead to a higher rate of uninsured young male drivers on the road. However, it's important to note that some states have banned the use of gender in setting insurance rates, such as California, Michigan, Hawaii, Massachusetts, North Carolina, and Pennsylvania.

While gender-based insurance rates can have a significant impact on young men, it's worth noting that other factors also play a role in determining insurance premiums, such as age, driving history, and geographic location. As young men gain more driving experience and build a clean driving record, their insurance rates will likely decrease, regardless of their gender.

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