Gender Differences

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Many different forms of anti-discrimination legislation have progressed through Parliament in recent years making it illegal to discriminate against just about any demographic in favour of another. Yet, in spite of all this legislation it is a well known fact that female drivers, especially young female drivers, get cheaper car insurance than their male counterparts.

In most walks of life such a fact would be illegal yet in insurance it is not. The Sex Discrimination (Amendment of Rules) Legislation that came into force on the 6th April 2008 specifically allows insurance providers, with the supervision of the Association of British Insurers to offer female drivers cheaper policies if relevant actuarial and statistical data could be produced that proved that gender was a factor in the assessment of risk.
The information that the insurance companies produced in order to meet these guidelines makes fascinating reading. It is updated regularly to give an almost up to date view of the differences in claims between men and women.

The data showed the difference between the average claims cost per policy for women and men for private motor insurance in 2005. It is calculated by dividing the total cost of claims by the total number of policies, meaning that the most accurate view across the board is presented. The ABI chose to present the information in this format because it offers the most comprehensive evidence possible. It is difficult to prove risk based on driving ability between men and women, but the risk to the insurance company can be proved by the value of the claims made by the different genders.

The most telling statistic came within the 17 to 20 age range where the average female claim cost less than 50% of the male claim. The difference is not due to women driving cheaper cars - though this may be true to a small extent - but rather a lower volume of claims being spread across the entire insured female population.

Between 21 and 25, 26 and 30 and 31 and 35 the cost of a female claim is roughly 70% of that of a male claim but then rises quite sharply. In fact, only the 46-50 age range and the 71-75 age range had men and women making claims of comparable value.

As long as a large difference remains between the value of male and female claims the insurance industry, by law, will be able to discriminate on the basis of gender in the costs of the policies they offer. Many insurance companies, such as Co-operative Insurance, offer reduced policies for female drivers based on their own evidence that women have less expensive accidents, particularly in the younger age brackets and also provide handbag cover up to £250. Of course, if you're male it's still possible to get a great deal, it's just likely that it won't match up to that of a woman of the same age.

If you're looking to renew your policy elsewhere, try Co-operative Insurance for their award winning car insurance.

Susan Kehan is a keen writer about car insurance and home insurance products.

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