Will there ever be equality in auto insurance rates?

Canadian women are in the driver’s seat when it comes to auto insurance rates.

Depending on where they live, women pay about 5%-to-15% less in vehicle insurance premiums than men, according to RateLab.ca. In 2020, women paid an average $141 per month, compared with a $163 monthly average for men.

Men’s higher premiums are linked to driving statistics, including aggressive driving. According to StatsCan figures, of 1,851 transport deaths reported in 2018, 1,313 involved male drivers.

However, in 2018, an Alberta man legally changed his sex on a government-issued identification to female as a way of obtaining lower auto rates. In a CBC article, he said, “I’m a man, 100%. Legally, I’m a woman. I did it for cheaper car insurance.”

It’s an extreme way to obtain a lower premium and Theresa Wicks, service team leader at Mitchell & Whale, said she’s never heard of “anything quite like that.” But she does note that “there’s consistently a pursuit for savings on auto insurance” in Ontario.

“That’s something — regardless of gender — on the radar for everyone,” she said. “Gone are the days when we can compare our insurance rate to that of our neighbour’s, because there were fewer factors taken into consideration like age, gender and maybe your vehicle use.”

Nowadays, there are many individualized rating factors: gender, age, vehicle exposure, location of residence, traffic tickets and accident claims.

With insurers collecting this kind of data to determine rates, Wicks said, “it becomes more advantageous for us as brokers to help all of our customers — regardless of any specific factor like gender — to find the most competitive offering.”

That offering is likely fairer in the E.U., where gender-based insurance pricing was banned. Could this change happen in Canada? Wicks said, “anything’s possible.”

But any changes, which are determined and overseen by FSRA, wouldn’t be immediate. And that’s a consumer benefit, according to Wicks.

“Consumers are protected by processes that oversee changes so that, one way or another, an immediate change is not made that might impact negatively on the side of a consumer and impact positively on the side of an insurance company,” she said.

South of the border, rate structures favour male drivers. Research from The Zebra looked at premiums by gender, age and location and found women can pay up to 7.6% more than men, depending on their age and location.

Only seven states — California, Hawaii, Massachusetts, Michigan, Montana, North Carolina and Pennsylvania — have banned gender as a rating factor for auto premiums.

Canada, meanwhile, is harnessing technology to improve rates. “There are several insurance companies in Ontario already utilizing analytics devices that help measure driving habits and vehicle usage,” Wicks said.

CAA is one, using telematics to measure distance driven and allowing drivers to pay per 1,000 kilometres. “Other carriers measure things like acceleration, hard breaking, mobile device usage,” she said.

For now, however, the industry continues to rely largely on individualized rating factors, of which gender is one. But more consumers may adopt these analytics devices “to maximize savings they might not otherwise have the potential to receive,” said Wicks.

 

Feature image by iStock.com/M_a_y_a