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How Gender Affects Car Insurance Rates

How Gender Affects Car Insurance Rates

While there are several ways to lower the cost of your car insurance, legally changing your sex isn’t one that comes to mind. But that’s exactly what one young man in Canada did in order to reduce his premium by $1,100 per year. While his reaction was extreme, it may come as a surprise to drivers that gender affects the price of car insurance premiums.

In Singapore, women pay up to 13.6 percent lower car insurance premiums than for men of a similar profile, according to the Straits Times. Valuechampion, a personal finance portal, found that male drivers in their 20s paid around 10 percent more than women of the same age for car insurance.

Why women pay less for car insurance

A major reason for charging male drivers with higher prices is that they tend to present a higher risk. According to the World Health Organization, males are more likely to be involved in road traffic crashes than females. Around 73 percent of all road traffic deaths occur among young males under the age of 25. They’re also nearly three times as likely to be killed in a road traffic crash as young females.

In other words, young male drivers are simply more expensive to insure.

All other factors being equal, female drivers tend to have a better risk profile. Mr Peh Chee Keong, vice-president and head of motor insurance at NTUC Income, shares: “Based on our records, the claim experience for female drivers is slightly better. In other words, they generally make fewer claims than male drivers.”

Other factors that influence the gender pricing gap include the average distance covered by women versus men and the type of cars typically chosen by women versus men.

The influence of age on car insurance premiums

On top of gender, the age of the car owner is another major factor in determining car insurance premiums. The best age to get the cheapest premium is from 30 to 50.

For those car insurance under 30 they tend to get more expensive the younger you are, as drivers in their 20s typically have fewer years of driving experience and are seen to have a greater tendency to drive recklessly, thus posing a much greater risk of having an accident.

On the other hand, both male and female drivers in their 30s and 40s experience a substantial fall in car insurance premiums. This is followed by an increase once more as they enter their 50s, as they generally become more prone to accidents caused by medical conditions and also have a higher risk of injury.

How male drivers can reduce their insurance costs

Although gender affects the cost of car insurance, you don’t need to change it legally on your identity card for the sole purpose of lowering your premium. One way to lower car insurance costs is to choose a reasonably priced car. Luxury and continental vehicles are a magnet for costly premiums as their parts are more expensive to replace.

More importantly, drivers need to build a good driving record. Insurance companies will usually ask drivers to declare their claims over the past two years, and will reward those who prove themselves responsible and less risky.

This is done through a No-Claims Discount (NCD), which is a discount on your car insurance premium if you have not made any claims during the period of insurance. Drivers who have made a claim but are not liable for the accident may also be eligible for an NCD, depending on your insurance provider.

There’s even more good news—NCDs increase by 10 percent for every year that you stay claim-free. Drivers who achieve this for five consecutive years hold NCD50 status, which is typically the highest insurers will go, and which translates into a 50 percent discount on your premium. DirectAsia, though, offers up to NCD60, which means an additional 10 percent discount on the car insurance base premium for drivers who have reached NCD50 status.

So while it’s medically complex and expensive to legally change your sex in Singapore and it’s impossible to prevent yourself from ageing, know that many factors are within your control. By being a responsible driver, you can lower your insurance premium—and, of course, keep yourself safe on the road.