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Why is Women's Car Insurance Cheaper?

Updated on March 12, 2011

If you thought the battle of the sexes is over, you now have a reason to think again. Car insurance service providers prefer female drivers than their male counterparts. Why? Simply because female drivers are thought to be less risky drivers than men; this should not be construed to mean that ladies face fewer accidents than men, no it means that the damage a female driver will cause in the event of an accident is significantly much less than one that a male driver will cause.

As a way of ‘rewarding’ women for being safe and less risky on the road, insurance companies will give them low premium rates. On average, a woman’s insurance premium rate will be at least 30% lower than that of a male counterpart with a similar demographic profile.

A woman becomes a good risk driver the moment they turn 17. If you are a young lady, you can earn yourself an even greater discount by going for the pass plus certificate. This certificate is earned after a series of extra driving lesions dedicated to young lady drivers after they are done with their basic driving tests. The pass plus certificate can earn you a whopping 30% discount for the first year.

So what really is the cut for women? First and foremost, women will drive at a slow speed than men. As a result, accidents, in the event of an inevitable one, will be less serious and less fatal. What this means is that even if a woman were to file a claim as many times and as often as a male driver does, generally a woman would claim a less amount.

On the flip side of the coin, because a male driver would most probably be driving at a very high speed, in the event of an accident, even if the accident takes place only with the driver involved, the loss will be significantly higher. If the accident involves two cars which are highly damaged, then it will be the insurer’s nightmare, hence the high premiums.

There are some auto insurance service providers today who only specialize in issuing auto insurance policies to women drivers only. In other words, the companies will only insure women drivers to an extent that they discourage even a combined insurance policy with a husband. If you are to get your insurance policy from such a company, a woman to woman combined policy is preferred that a joint one with your husband. This is because the company would give you a great discount but when considering the presence of your husband’s high risk, they hold it back.

You could be thinking, how do the companies earn and make their profits if the premiums are that low? Well, the catch is, if they can get business from many women, then their volume of business will be high, meaning the high volume will cover up for the low premiums. 


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    AussieInsurance 6 years ago

    You've hit the nail on the head with your explanation of why women's car insurance is often cheaper than men's - because they are widely considered less risky drivers. However, I would point out that there are many types of drivers that are considered less risky who also get the benefit of lower car insurance costs. Those drivers include students with good grades, middle-aged drivers with no accidents on record and drivers with vehicles considered "safe".