Do insurers penalize women for “driving while female?”

A major consumer group contends that women pay more in auto insurance just to get behind the wheel, shattering a common urban myth that men face higher premiums.

And sometimes the cost is a lot more. In 38 instances, women with perfect driving records were charged at least $100 more per year than their male counterparts, according to a study by the Consumer Federation of America (CFA), which compared car insurance premiums for men and women in 10 big cities across the U.S.

The study looked at six major insurers: Allstate (ALL), Farmers, GEICO, Liberty Mutual, Progressive (PGR) and State Farm. It found that in six instances, applicants for car insurance faced premiums of at least $500 higher solely because they were “driving while female,” the study said.

“Insurance companies punish female drivers with perfect records far more often than men,” said CFA insurance consultant Douglas Heller. “Regulators should reconsider allowing companies to continue using it at all.”


Source: Consumer Federation of America

Ironically, twice as many people believe insurers charge men more for auto coverage than women, according to the CFA survey. But that’s wrong. 

CFA researchers compared 165 pairs of insurance quotes for men and women and found that 40-year-old women were the most likely to be charged more than men, while 60-year-old women were also “penalized more often, facing higher premiums than their male counterparts” in nearly 60 percent of the cases where gender was a factor.

“It is widely believed that male drivers, especially young male drivers, cause more and costlier accidents,” said CFA director of insurance Robert Hunter. “State insurance commissioners should insist that auto insurers explain why they usually charge middle-aged and older women higher rates than men.”

Even younger women are charged more in certain instances, CFA found. The nation’s second-largest car insurer, GEICO, charged female drivers higher premiums 83 percent of the time, with surcharges averaging $176 annually, including average penalties of $143 for young females 20 years old, compared to males of the same age, according to the CFA.

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