Europe slams brakes on lower insurance rates for women

By Chris Kissell Posted : 03/14/2011

Car insurance rates for womenFemale drivers rarely catch a break.

Ever since Anne Rainsford French Bush became the first woman to receive her license in the U.S. – 111 years ago this month – women have endured decades of bad jokes about their alleged behind-the-wheel deficiencies.

Car insurance has always provided a ray of sunshine to female drivers. Women – especially younger women – generally pay less for car insurance because they submit fewer claims than testosterone-fueled male drivers of the same age.

But that's about to change in Europe. On March 1, the top court in the European Union (EU) ruled that insurance companies no longer can use gender as a factor in pricing insurance. The court said such a practice "constitutes discrimination" and ordered EU insurers to take a unisex approach to pricing.

Critics blasted the court's decision, saying the new gender-neutral standard could raise young women's insurance rates by as much as 25 percent.

Meanwhile, young men across Europe likely yawned and went back to watching soccer;  maybe they’ll pay attention when they realize their rates will likely drop.

European women can expect to receive this particular lump of coal in their Christmas stockings on Dec. 21, 2012, the date the court has ordered the unisex rule to go into effect.

Are American female drivers next?

What are the odds that a similar decision could be handed down in the United States?

Very slim, according to Michael Barry, a spokesman for the Insurance Information Institute. For starters, insurance in America is regulated at the state level.

"There is no federal governmental agency which rules today on the rate-setting criteria," Barry says.

Just six states prohibit gender-based insurance pricing – Hawaii, Massachusetts, Montana, Michigan, North Carolina and Pennsylvania.

"Auto insurers doing business in the 44 other states can set rates based on a policyholder's gender," Barry says.

Barry points out that car insurance companies look at proven predictors of risk when setting rates.

"Many have concluded that a policyholder's gender is one of [the predictors]," he says.

Men vs. women: Tale of the tape

Indeed, contrary to stereotypes, statistics generally back up the belief that women are better drivers than men – or at least more careful drivers.

All those males cracking the corny jokes? ("We bumped into some old friends yesterday – my wife was driving.") They accounted for 70 percent of all motor vehicle crash deaths in 2009, according to an Insurance Institute for Highway Safety (IIHS) analysis of federal government data.

And it's not just that men drive more miles than women. IIHS reports the rate of fatal crashes per 100 million miles driven was 50 percent higher for males than females between 2000 and 2001.

IIHS also says men are significantly more likely than women to engage in risky behaviors such as:

  • Speeding
  • Driving while intoxicated
  • Not using seatbelts

As men grow older, they appear to get a little wiser about driving. The largest crash gap appears among drivers ages 16 to 19. By age 60, the crash rates for males and females are nearly identical.

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