Why is women's car insurance cheaper?

Why is women's car insurance cheaper?

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Although insurance providers cannot by law discriminate against drivers based on their gender, the average quotes that women are shown are consistently cheaper.

According to data from MoneySuperMarket, the median cheapest annual price for car insurance between January 2018 and January 2020 was £581.28 for men and £460.15 for women – a £121.13 difference (26%).

This remained relatively stable throughout the period analysed, with the difference never dropping below 23% or rising above 29%.

Price disparity between car insurance for male and female drivers

Through analysis of nearly 15 million MoneySuperMarket enquiries we explore some of the factors that are known to influence car insurance prices to help understand what may be driving this disparity.1

When taking out car insurance, insurers attempt to determine how much of a ‘risk’ you are, with riskier drivers likely to be quoted higher prices.

In order to find this out, providers will ask questions about you, your driving history, the car and how you plan to use it. 

This includes:

  • Your age: younger drivers are typically deemed to be a higher risk due to the proportion of drivers aged 17-24 that are involved in accidents
  • Your occupation: certain occupations are deemed to be riskier and therefore, people in those roles may experience more costly premiums
  •  Your driving record: one of the biggest factors affecting cost is your driving history. If you can go a number of years without claiming on your insurance, you may be able to reduce costs
  • Your postcode: those living in areas with higher rates of car crime or more road traffic can expect higher costs
  • The type of car you drive: Providers group cars into 50 car insurance categories dependent on factors including price, performance and the cost of repairs. Cars that fall into the highest groups can expect the highest premiums
  • Your car’s security: fitting an alarm or immobiliser, or parking your car in a garage or on a driveway rather than on the street, will help to bring down the cost of insurance
  • Your car’s mileage and your driving habits: The more miles you drive, the more likely you are to be involved in an accident, so the more expensive your insurance will be. Using telematics or ‘black box’ insurance – whereby the insurer provides a recording device or mobile app to track when, where and how you drive – may bring down the price by encouraging safer driving. For some questions the responses given by men and women are very similar. So while these factors can influence cost, they are unlikely to be making prices cheaper for women.

For example, the average number of years in possession of a licence (12), average personal miles driven per year (6000), average age of the main driver on the policy (36), average no claims years (4) and average voluntary excess amount (£250) are all identical for men and women, during the period analysed. 

There are, however, some cases in which men and women commonly respond in different ways, which may partly explain the changes in price. In this study we examine some of the key areas where this difference occurs.

One factor which can have a significant influence on the price of car insurance is occupation, and our data revealed that a greater proportion of men worked in jobs that have a higher average premium.

We ranked every occupation listed by car insurance enquirers according to their average premium price – with 1 having the highest average premium and 1155 the lowest.2

Top 5 occupations with the highest average premiums

Click to view more occupations

Rank Area Average premiums
6 Apprentice £1,322.99
7 Scrap Dealer £1,304.45
8 Doorman £1,229.82
9 Carpenter Assistant £1,221.42
10 Abattoir Worker £1,217.06

The proportion of men working in the 100 occupations with the highest average premiums was 16%, compared to just 1% of women. The average premium for top 100 occupations was £895, compared to £508 for occupations outside the top 100. 

Distribution of men and women by occupation

Furthermore, 50% of men and only 18% of women worked in the 500 occupations with the highest average insurance premiums.

Given the breadth of information that is used to determine car insurance premiums, it is highly unlikely that any one factor is responsible for the price discrepancy. However, the difference in the proportion of men and women in these occupations is significant enough that it may be having some effect on the average price for each gender. 

Another factor that can influence car insurance price is the make and model of your car. Cars that are rare, powerful and more expensive are deemed to be a higher risk for insurance providers, and this may lead to higher premiums.

As with occupations, we ranked 900 car makes and models from those with the most expensive average premiums (1) to the least (900).3

Distribution of men and women by car make and model

While the difference between men and women was less pronounced than with occupations, a greater proportion of men owned cars that fell into the higher brackets. According the data, 3% of men entered a car make and model with one of the 100 most expensive average premiums, compared to just 1% of women. 

This difference may seem small but the average premiums for the top 100 cars are significantly higher - £978.28 compared to £456.83 for the remaining makes and models – which means even a small difference could be contributing to a price disparity for men and women.

This trend also continued for cars outside the top 100 - male enquirers were more likely to say they owned of the 400 cars with the highest premiums, whereas female enquirers were more likely than men to say they owned a vehicle in the bottom 500.

Proportion of men and women owning one of the 400 cars with the highest premiums

The make and model of your car determines which insurance group it belongs to, which helps to determine your premium.

Each vehicle type is assigned an insurance group, from 1 to 50, with higher premiums associated with the higher number groups. While the correlation between insurance group and premium isn’t always strictly linear, people with vehicles in higher insurance groups tend to pay more.

Our data reveals that men are consistently overrepresented in groups at the higher end of the spectrum. 

Nearly one in five male enquirers (18%) were classed as being in the top 20 groups, while two in five (40%) were in the top 30. In contrast, only 7% and 21% of women fell into those same groups, with over three quarters (79%) appearing in the bottom 20.

Distribution of men and women by insurance group

Our research revealed another factor that may be influencing the price difference between men and women.

Data suggests drivers who select ‘social only’ for their car usage type may incur higher premium prices. Only 38% of women selected this option, compared to 42% of men.

The difference in the responses given by male and female enquirers to this question is, however, quite low, and therefore the impact on respective price for each gender is likely to be minimal. But, coupled with some of the more significant differences, it could be playing some part in the overall trend.

Insurers, by law, cannot offer different prices to drivers based on their gender, but we see differences in the amounts paid by men and women on average.

There are many factors that determine price and the likelihood is that men more regularly fit the profile of a ‘risky’ driver, which would lead to car insurance providers charging them more based not on their gender but on their risk profile.

Regardless of your situation there are ways that you can reduce your premium, such as:

  • Parking in a secure location: Keep your car off the street and in a secure garage or car park, where possible. Additionally, you may want to think about increasing the security of the car with an alarm or immobiliser
  • Increasing your excess: When you buy car insurance, you will be asked if you’d like to set a voluntary excess amount. Typically, the more you’re willing to pay for your excess amount, the lower your premiums will be – just remember that if you have to claim you’ll need to be able to afford to pay the excess, so don’t set it unrealistically high
  • Reducing your mileage: If possible, it is worth considering a lower annual mileage amount when you renew your insurance. But don’t knowingly set the mileage amount too low or you may risk invalidating your policy.
  • Checking your car insurance group: If you’re buying a new car, check what insurance group band it falls into. The closer to 50 it is, the more likely you will have to pay a higher amount so you may want to rethink the make and model you go for.
  •  Avoiding paying by monthly direct debit: Most insurers charge a supplement if you spread the cost over monthly payments. If paying in one go is not realistic, consider taking out a 0% purchase credit card to cover the one-off payment – just ensure you have cleared the balance before the 0% interest period ends and, ideally, within 12 months, otherwise you could end up paying for two policies at once, following your next renewal.
  •  Shopping around for the best deals: Insurers tend to offer the best deals to new customers, so sticking with an existing policy when it comes to your renewal date could mean you miss out on a saving. Shop around online to compare deals.

To find out which insurance group your car is in, use MoneySuperMarket’s Car Insurance Group Checker free tool. 

Sources

  1. All data on this page is taken from 14,737,820 MoneySuperMarket car insurance enquiry records, from the 1st January 2018 to 31st January 2020
  2. Occupations with less than 100 records were excluded from this study
  3. Car makes and models with less than 100 records were excluded from this study

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