Gender as a Determinant of Car Insurance Premiums – A Form of Discrimination


03Gender issue is now the center of the debate ringing the European Union after an official asked for the EU high court to determine if the practice of using gender as a determinant of auto insurance premium rate is a violation of the European anti-discrimination laws. The said practice is also used in the United States thus the issue is now echoing in the auto insurance industry in America.

Generally males receive higher auto insurance rates than females primarily not because of gender per se but on statistical facts associating males to higher risks. Gender is just one of the factors taken into consideration when it comes to allotting premium rate that is uncontrollable by the clients. Different companies also have differing weights given to each and every factor that will all be responsible to the price outcome of the auto insurance coverage.

Statistics here in the United States show that males tend to be more involved with major car accidents moreover the expenses associated with the damages both physical and property  are higher than that of females. Records from the National Highway Traffic Safety Administration revealed that in 2008 58 percent of all motor vehicle crashes has an involvement of male driver.

Today there are figures showing that the proportion of males and females involvement in car accidents is becoming nearly equal. The data of Centers for Disease Control (CDC) showed that in 2005 males have 52 percent involvement with fatal and injury motor vehicle crashes.    Nonetheless the associated costs are higher for males.

Auto insurance companies firstly assess their prospective client’s based on how risky can they be behind the wheels which will determine how likely the client will file claim in the future. Now since gender can be a determinant of accidents involvement according to statistics, insurers make use of this factor as one of the determinants and not the sole aspect that would determine insurance rates.

The use of “gender” in determining what rate a policyholder will have is a questionable practice for some people. The issue of gender discrimination is what people are pointing out. The heating debate which started in Europe is now forcing insurers, consumers and government representatives here in the United States to take a second look at this practice of factoring gender to determine who pays what. The said practice has long been utilized by the majority of insurers in the United States and only Montana and Massachusetts banned insurers in their states from using gender in determining auto insurance rates.