Does Car Insurance Favor Women Drivers?

Women appear to be safer drivers, which can translate into lower insurance costs.

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Today’s guest post comes from Alan Dunn, a serial entrepreneur and publisher of various consumer education websites, including a site with tips on how to save money and a destination for drivers with a wealth of information on car insurance companies to help people understand the details of auto insurance coverage.

Jokes about bad drivers often focus on women. But dig a little deeper, and you discover these jokes must be written by men, because car insurance companies prove year after year women are, in fact, better drivers.

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One of the most important insurance industry agencies is the Insurance Institute for Highway Safety (also known by its acronym IIHS). The IIHS was founded in 1959 with a primary goal of researching data to find out causes and prevention methods for motor vehicle accidents. While some industry data is published by agencies with lesser resources, the IIHS is actually funded by auto insurers to help them gauge risk using the three common factors of operating a motor vehicle including human influence, vehicle influence and environmental factors.

The 2008 IIHS gender report found that more men die every year in car accidents than women. While on the surface there could be a number of reasons for this, the report also proved that men typically engage in much riskier driving practices, such as:

• Not using seat belts

• Driving under the influence

• Driving above posted speed limits

A study of car accidents showed that when male drivers have car accidents, the results are often much more severe than when women are behind the wheel. In fact, the 2008 data show a number of frightening statistics for male drivers, including:

• 71 percent of all motor vehicle deaths were males.

• 70 percent of pedestrian deaths were caused by male drivers

• 87 percent of bicyclist deaths involved male drivers and

• 91 percent percent of motorcycle deaths

The only time when a woman had a greater chance of being killed was in comparing crashes of equal severity by gender.

Why are gender studies important to car insurance?

The auto insurance industry is a for-profit industry, meaning that all car insurance companies are in business to make a profit, and since the formula for profit includes an analysis of risk management, studies for almost all factors have been commissioned. They include gender, cell phone use, and zip code, and determine car insurance premiums.

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How much money is spent on measuring risk?

Insurance companies spend tens of millions of dollars annually in research and offer some of the most wanted jobs in the world to graduates with mathematical backgrounds. In fact, according to Payscale.com, actuary jobs can have starting salaries above $100,000 a year and are consistently rated as one of the “best jobs” in America due to the long stability outlook of the insurance industry (as the vast majority of actuary jobs are in this sector).

Do women automatically get lower rates?

No. Car insurance companies base auto insurance premiums on more than just your gender, so it is possible to pay higher premiums than one of your male friends. This could be due to your personal driving record, the type of vehicle insured, how the vehicle will be used or even something simple as your credit score. In most cases, women drivers will get lower rates but it’s not automatic.

Who has the best car insurance rates for women drivers?

Shopping for auto insurance coverage is like shopping for a new television in many ways. A local electronics store may have a 70 inch plasma TV on sale for $400, but when you dig deeper the TV has no remote control, no surround sound, no HD input and is powered by a squirrel chasing a nut on a wheel. It is perfectly normal to search for cheap car insurance quotes online, but the key to finding the best rates will depend on a combination of the company you choose and your personal knowledge of auto insurance. It is impossible to classify who has the best coverage since many factors exist outside of just the policy premiums and intangible factors such as customer service have more or less importance depending on whom you ask.

[Visit the U.S. News Personal Finance site for more insight and money management tips.]

And keep this in mind: Outside of car insurance, women might not always get the better deal, especially when it comes to buying a new or used automobile. According to Women-Drivers.com, female drivers can pay over $1,300 more than male drivers while negotiating the price of a car.

Looks like both genders could learn something from each other.