Why do women pay less for car insurance?

There are many factors that influence how your car insurance premium is calculated. But did you know that you will likely pay lower premiums if you are female?

We got in touch with an insurance expert to find out why this is the case, as well as look at other factors that play a role in calculating your car insurance premiums.

Tip: Every insurer will offer you a unique premium. Get a quote today to see whether you can save.

It all comes down to statistics

According to Christelle Colman, insurance expert at Old Mutual, around the world, it’s a proven actuarial finding that women are statistically lower insurance risks than men. 

“Women take fewer risks, are more careful in their decision-making, hardly ever exceed the speed limit, and shy away from any form of road rage. Statistics show that women have fewer accidents, and the accidents they do have are less severe,” says Colman.

“Considering that the cost of repairs is one of the biggest driving factors when it comes to pricing motor insurance, it is easy to understand why women are charged less. Statistically, the damages incurred by women simply cost less to repair,” she explains. 

“It’s worth stressing that this phenomenon is not limited to South Africa, and the trend is well established and accepted as fact around the world,” she adds.

Colman points out that race is never used as a rating factor in motor insurance in South Africa.

Which other factors are considered?

Besides gender, Colman points out that there are a host of factors considered when motor insurance premiums are calculated. For example, insurers look at credit scores, place of residence, occupation, and claims history to determine your insurance premium. 

However, it may surprise you that the colour of your vehicle also has an impact on your premiums. This is because, statistically speaking, certain colour cars are more at risk than others.

“Whilst colour of vehicle is a well-known rating factor, the influence of the vehicle colour is often rather small. Insurers pay more attention to knowing if you have had any previous accidents, the number of kilometres you drive annually, and where you live,” says Colman.

Your age will also have an impact on your insurance premium. If you’re under the age of 25, you will likely have higher premiums because you haven’t been driving for very long. On the other hand, if you’re a pensioner, you may have access to a reduced premium.

“Most insurers offer a significant discount on motor insurance premiums, or reduced or even zero excess if you are over the age of 55,” says Colman.

READ MORE: Older people pay more for car insurance and other myths busted

If you use your car for business purposes, Colman recommends disclosing this to your insurer. You may end up paying quite a bit more, or the insurers will ask you to insure the car on a business policy. 

“However, if the usage of the vehicle is not disclosed, you run the serious risk of having your claim rejected in the event of an accident during working hours,” says Colman.

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