Research & Commentary: Use of Gender in Auto Insurance Scoring

Published June 24, 2011

Some stereotypes about groups are pure calumny, others have a small grain of truth, and some are absolutely, 100 percent true. What follows concerns a stereotype about men and women that is 100 percent true.

Upon reviewing a great deal of research, Heartland Institute staff confirmed what most people already know intuitively: Men outdo women in all categories of seriously bad driving. We could not locate a single report or study of any sort finding women engaged in high-risk on-the-road behaviors more often than men.

There’s some evidence women may get into more minor accidents than men, but men are much worse drivers than women in just about every way that concerns auto insurers. When they are behind the wheel—or indeed, doing anything else that requires personal liability insurance—men do seriously dumb things a lot more often than women do.

Because women are a safer bet, insurance companies charge women less for liability insurance wherever doing so is allowed. Discriminating (almost always against men) in this case results in fairer insurance prices for everyone. Using gender as a factor in determining liability insurance rates is a valid and important procedure, and the use of it should not be unduly restricted through laws and regulations. States such as North Carolina, which impose such restrictions, should strongly consider removing them.

The following documents provide factual information on gender and insurance risks.

Sex Differences in Driving and Insurance Risk
A comprehensive, international report prepared by the Social Issues Research Center (U.K.) finds in all cultures and countries examined, men have higher crash rates, and these differences derive from “fundamental differences in specific areas of behavior and psychological functioning.”

The Price of Equality: Unisex Insurance Premiums May Cost Consumers More
This report from The Economist documents a proposed European Union effort to end gender-based insurance scoring and explains how it would likely result in higher insurance premiums.

The Efficiency of Categorical Discrimination in Insurance Markets
Casey Rothschild of Middlebury College performs a largely mathematical analysis showing almost all categorical pricing bans (including those on gender) will result in less-efficient insurance and, therefore, higher average prices for insurance.

Age and Gender Effects on Auto Liability Insurance Payouts
Writing for the Journal of Insurance Regulation, a team of three scholars concludes women almost always make less-expensive insurance claims than men following automobile accidents, even after adjusting for a wide variety of possible variables.

Gender and Age-Related Differences in Attitudes toward Traffic Laws and Traffic Violations
An Israeli researcher finds women not only follow traffic laws better than men but also say they believe following them is more important.

Gender Differences in Drunk Driving Prevalence Rates and Trends: a 20-Year Assessment Using Multiple Sources of Evidence
Jennifer Schwartz of Washington State University finds women are far less likely to drive drunk than men and are somewhat more likely to be arrested when they do so.