Most states allow insurers to rate on gender since crash statistics are different for males and females. Data shows males are more likely to crash - especially in the early years of driving when they are known to be more aggressive as a novice driver.The Insurance Institute for Highway Safety (IIHS) notes that men typically drive more miles then women and engage in riskier driving behavior, such as speeding, driving when intoxicated and not using a seat belt. The IIHS also found crashes involving male drivers tend to be more severe than female drivers. Insurers review this information and rate accordingly. That doesn't mean that males will always pay higher rates than females. Gender differences in fatality risk diminish with age. When men and women enter their 30s, in general auto insurance rates become comparable for both sexes with many insurers, and depending on their own data, may allow males to get slightly lower rates than females. But as drivers age into their 60s, rates for males usually start to increase again over the females, as crash statistics again show men of an older age crash more than females.
These states do not allow gender to affect rates:
- North Carolina
The following states prohibit use of credit scores and history as a factor:
- Purchase price
- Theft rate
- Cost of repairs
- Accident rate
- Safety tests
Insurers also want to know why you're driving your car. A vehicle used to commute to school or work poses more of a risk than the car you only take out of the garage once a week. Personal use of a vehicle costs less than business use, since those using their car for business purposes have a higher chance of being in an accident due to increase driving time. If you use your car at all for business, check to see if it's still covered under your personal auto policy. You may need a business-use or commercial policy instead and be voiding your personal policy by using your car for business. If you use your vehicle for ridesharing, get a policy covers that specifically. Business and ridesharing policies cost more than personal policies, but that is because the risk the insurer is taking on is more. The less you drive, the less risk you have of being in an accident. You insurer can also try to determine from the length of your commute if you head into a metro area from your rural or suburban home. If you live outside of Atlanta, for instance, but your commute is 30 miles, your insurer can predict that though your local area is low risk, your commute into the heart of a heavily populated metropolitan area puts you at greater risk. If annual miles driven go down, let your insurance company know - likely you can save money. The more types of coverage with higher limits you have, the more it will cost you since the insurer is taking on additional risks by giving you more coverage. Check your state requirements, keeping in mind that minimums won't necessarily cut it in a serious accident, and compare quotes to see if extra coverage and protection makes sense for your financial situation. Here are the main coverage components of a policy:
- Collision and comprehensive
- Uninsured/underinsured motorist
- Medical payments or personal injury protection (PIP)
You can't control your age or gender, but there are some factors you can control.
Keep a clean driving record, build a good credit score, purchase a vehicle whose insurance won't break the bank, and choose the right coverages for your needs.Just because your rating factors aren't perfect doesn't mean you can't get better rates. Each insurance company weighs your risk differently, so make sure you shop around once or twice a year. Find the insurer that is pricing competitively for your particular combination of factors. Rate quotes can vary by hundreds of dollars or more.
Strive to keep insurance companies happy by posing less of a risk with the rating factors you can control, and in turn, your wallet will be happier, too.