Car Insurance for Women and the Gender Gap

When it comes to the calculation of car insurance premiums, insurers sift through a vast amount of information from each applicant to determine how much of a risk you are to insure—and how high your premiums should be. A question that plagues many drivers, then, is: do insurers also factor gender into their calculations? In other words, is car insurance for women cheaper than it is for men?

In this guide, we're going to look at whether insurers are allowed to take gender into account when calculating premiums. We'll also delve into whether there is a gender gap in car insurance. Get the full lowdown below!

Is there a difference in car insurance for women?

In the past, insurance companies were allowed to factor gender into their premium calculations. This meant that many insurers started offering lower premiums to female drivers automatically due to them being seen as the safer drivers on the road with fewer claims and accidents. As a result, male drivers were automatically lumped with higher premiums.

In a move to get rid of this gender discrimination, however, the EU introduced a new rule that made it impossible for insurers to discriminate on the grounds of gender. In other words, they made it illegal for insurers to automatically offer lower or higher premiums to a driver based on their gender.

Instead, insurers must draw their focus onto other factors like driving history, claims history and car type. Despite this move, there is still a very clear gap between genders when it comes to car insurance. But it's not as clear cut as it might sound—let's take a look why…

Which is more expensive: car insurance for women or men?

While the EU's move was intended to narrow the gender gap in car insurance, it ended up widening it. Nowadays, male drivers are forking out much more for their insurance premiums than female drivers. According to figures collected by MoneySuperMarket between January 2018 and January 2020, male drivers are looking at an average premium of £581, whilst female drivers have to pay an average premium of £460. That's a difference of £121, or 26%.

Interestingly, during the same period, they found that the difference never dipped lower than 23% or went over 29%. The gap from 2017 to present day seems to have held up largely the same if we're using the figures from MoneySuperMarket. It's rather interesting to find that, despite the removal of gender from premium calculations, there’s still a hefty gap between the average premiums paid by men and the average premiums paid by women.

So, what's the deal? To see how this gap has changed since before and after the EU directive came into effect, we headed over to Confused.com for answers. In one of their studies, they found the following:

• The largest gender gap before the EU directive was £121 (December 2011)
• This gap moved down drastically after the directive to £27 (March 2013)
• The largest gender gap after the EU directive moved back up to £121 (June 2017)

Why is car insurance for women cheaper?

When calculating insurance premiums, insurance companies carefully consider a whole host of factors. As we now know, gender is not one of them. Instead, insurers must focus more intently on each individual—looking at what kind of car they drive, what their mileage is like and where they live. They sort through dozens upon dozens of these kinds of factors to create the most accurate premium for each driver.

Every factor that is considered ultimately relates back to one key question: is this person a high-risk driver? That is, are they likely to make a claim, and is it likely to be an expensive one? Insurance companies aren't in the business of losing money, so they need to make sure that they're able to counter any potential losses in the near future. And there lies the true answer to the gender gap in car insurance: risk.

Typically, insurers have found that men tend to fit the profile of a high-risk driver more than women. Again, this isn't because of their gender. Instead, it's because of the following factors...

Accidents and claims

If you've ever had to make an insurance claim in the past, you'll have undoubtedly noticed that your premiums increased upon renewal. This is because insurers feel that if you've made a claim once, you're likely to end up doing it again. Even if the accident wasn't your fault, you still have a potential risk factor associated with you. Now, when it comes to male and female drivers and their claims history, male drivers are the winners—and not in a good way.

According to data from Confused.com, over 1.4 million car insurance claims were made in 2018. Of these claims, women made up to 33% and men made up to 67%. In short, men are twice as likely to make a claim than women. Not only that, male drivers are also more likely to be at fault for the accident. Their data was broken down further into claim types:

• Fault claims: 8% women vs. 17% men
• Other claims: 24% women vs. 48% men
• Theft claims: 1% women vs. 2% men

They also found that men tend to make more expensive claims, with an average payout of £5,577, versus £5,150 for women. With men being more likely to end up making a claim, it's not surprising to find a gap in average premiums between genders. Insurers will simply take one look at their claims history and hike up their premiums accordingly. (Please note, this would stand the same for any female driver with a claims history.)

Driving offences

Another factor that can lead to you being considered a high-risk driver is whether you've committed a driving offence. This is for obvious reasons, of course. If you're caught speeding, drink-driving or injuring someone, you're going to automatically be labelled as dangerous or high risk. And when it comes to driving offences, male drivers top the charts once more.

As of March 2020, 2,725,811 drivers are penalty point holders—that's 6.62% of all full licence holders. Of these penalty point holders, 29.31% are female and 70.69% are male! Of the 10,678 drivers with 12 or more penalty points on their licence, a whopping 82.71% are male, whilst 17.29% are female. When these motoring offences are broken down into categories, male drivers beat female drivers every time, as you can see in the following data from Confused.com:

TABLE

If that wasn't enough to show that male drivers are more likely to fit the profile of a high risk driver than female drivers, these figures from Brake might just do the trick. They found that male drivers are responsible for 74% of road deaths, 69% of serious injuries and 57% of slight injuries! It's not too surprising then, given these figures, that male drivers tend to be lumped with the higher premiums.

Occupation

You might also be aware that your job can affect your car insurance premiums. Professional footballers, for example, are looking at premiums from £1,978, compared to £252 for invigilators! This is because professional footballers are more likely to make a claim than invigilators. If you happen to have a job that is commonly associated with a high number of claims, you're likely to have to pay higher premiums. Unfortunately for male drivers, this is yet another area in which they come out on top.

MoneySuperMarket found that the proportion of male drivers working in the top 100 occupations with the highest premiums was 16%, compared to only 1% of female drivers! When they broadened the scope, they found that 51% of men worked in the top 500 occupations with the highest premiums, in contrast to only 17% of women. In fact, it's only when you get to the occupations with the lower average premiums that women start to surpass men.

So, men are more likely to have jobs that historically, according to data available to insurers, tend to make the most claims—thus, leading to higher premiums. The difference in cost between average premiums can be hefty. The average premium for those with an occupation in the top 100 was £895, compared to an average of £508 for those outside the top band. It's easy to see, then, why there tends to be such a gender gap in car insurance.

Car

As you probably know, the type of car you own can have a huge impact on your car insurance. If it's expensive, for example, it's a higher risk to insure. For starters, if you're involved in an accident, it will be more costly to repair. Additionally, expensive cars tend to be a greater temptation to car thieves, meaning they're more likely to get stolen than cheaper models. Male drivers tend to have a slight lead in this particular category.

According to MoneySuperMarket, 3% of men owned a car model within the top 100 cars with the most expensive premiums, compared to only 1% of women. Though this might not seem like much of a difference, it becomes a bit more significant when we compare the average premiums—the average for those in the top 100 stands at £978.28, compared to £456.83 for the remaining car models. Their data showed that male drivers continued this lead, with 61% of male drivers owning a car in the top 400 (out of 900 overall), compared to 52% of women.

This disparity continues through to insurance groups. Insurers use a group system that runs from 1 to 50 to figure out how risky a car is to insure. If your car rests on the lower end of the scale, it will be less of a risk and, as a result, cheaper to insure. MoneySuperMarket's data found that 18% of men had a car within the 31-50 bands, compared to only 7% of women. No wonder premiums are more expensive for men!

So it's not really about gender...

And there you have it! You finally have the answer as to why there's a gender gap in car insurance. Rather than it actually being due to gender, it's instead all down to risk. Female drivers aren't paying lower premiums simply because they're female, but because they tend to lack the risk factors that male drivers are more likely to possess, e.g., a long claims history, driving offences and a high risk occupation.

Whether you're a male or female driver, there are plenty of ways in which you can reduce your premiums and make the most out of your car insurance. For more tips, tricks and advice, check out the resources below:

PassMeFast's insurance guides: 

• Black box (telematics) insurance—everything you need to know: if you're a safe driver, you could be rewarded with lower premiums. All you need to do is let your insurer fit a black box to your car. This will allow them to track your driving style.
• Why do young drivers pay higher insurance premiums?: if you're under the age of 25, you'll have to pay more for insurance than any other age group. Find out why this is the case and how you can work your way around it!
• Young Driver Insurance—Everything you need to know: aged 17-25 and looking for an insurance policy. Be sure to use our guide to get the best deal!