How Gender Inequity Affects Car Insurance Costs (2024) | Insurify

Some widespread beliefs about car insurance are myths or misconceptions. Buying a red car won't cause your premiums to skyrocket, and comprehensive coverage doesn't cover everything, despite what the name suggests. But the common wisdom that men have higher car insurance rates than women is true. That said, the full story is more nuanced.

Men have higher rates than women in all but a handful of states, but women pay a larger percentage of their average income toward car insurance in all states except Vermont and South Dakota.

Insurify analyzed the gender gap in car insurance pricing nationwide, examined why men have higher average rates, and looked into the pink tax on auto financing. Here's what you need to know to find the cheapest car insurance quotes, regardless of gender.

Do men or women pay more for car insurance?

Men pay about 5% more for car insurance than women nationwide. The average monthly full-coverage insurance rate is $176 for men, compared to $167 for women. South Dakota drivers see the biggest gender difference in car insurance rates, with men paying an average of $36 more per month than women.

Women have higher car insurance rates in these states

Women pay more than men for auto insurance in six states: Michigan, Nevada, Kentucky, Mississippi, Delaware, and North Carolina. Three of these states (Michigan, Nevada, and Delaware) are among the 10 places with the most expensive car insurance in the country.

Women have higher rates than men in these states, and they pay a higher percentage of income toward coverage in all six places.

States that ban using gender to set car insurance rates

California, Michigan, Hawaii, Massachusetts, Pennsylvania, and North Carolina prohibit the use of gender as a factor in setting car insurance rates. Women pay more for auto insurance than men in two of these six states. Auto insurers in these states can't assume men will get into more accidents or file more claims, so they spread those costs across all policies.

Montana was the first state to introduce laws prohibiting discrimination based on sex or marital status in insurance pricing and benefits in 1985. But 2021 legislation removed these protections, allowing auto insurers to use these factors as a data point to assess risk and determine car insurance premiums.

The Consumer Federation of America (CFA) criticized the change, pointing out that women paid more for car insurance in neighboring states that allowed gender-based pricing. Among major insurers (GEICO, Farmers, Liberty Mutual, and Progressive) analyzed by the CFA, two charged women more, one charged men more, and one had equal premiums regardless of gender.

Residents and women's groups have sued the state of Montana on the grounds that the new law gives insurers "free range to set discriminatory rates."

Women pay a higher percentage of income toward car insurance

In the U.S., women earn an average of 84 cents for each dollar men make, according to the National Women's Law Center (NWLC). Women make an average of $52,360 annually, and men make nearly $10,000 more, with an average income of $62,350.

The gender wage gap means that despite women having lower average car insurance rates in most states, they spend a higher percentage of their income (3.8%) on coverage than men (3.4%).

If women paid the same percentage of their income toward car insurance as men, their monthly average rate would be $148, or about $337 less than they currently pay annually.

The table below shows what percentage of earnings men and women spend on insurance. The national average percentage of income women spend on car insurance is 13% more than the average for men. The fourth column shows how much more or less income women spend on insurance relative to men, depending on the state they live in.

Vehicle safety for women is improving, but unequal

More men are killed in car accidents than women, but women have a higher fatality and injury risk than men in comparable crashes, according to biomechanics research from the NHTSA.

Crash test dummies have historically represented the average man, which resulted in a higher car accident fatality risk for female vs. male front-row occupants.

In 1960–2009 model-year vehicles, women had an 18.3% higher fatality risk than men, according to a 2022 NHTSA report. The fatality gap narrowed dramatically to 2.9% for 2015–2020 model-year vehicles.

Increased vehicle safety for women is largely due to including dummies to represent the average woman in more safety tests — a practice the NHTSA's New Car Assessment Program (NCAP) implemented in all tests, starting with 2011 model-year vehicles.

Why men have higher car insurance rates

Men are statistically more likely to engage in risky behaviors behind the wheel, including driving under the influence. Of the 44,036 fatal accidents involving male drivers in 2021, 22% of the men had a blood alcohol content (BAC) at or over the legal limit of 0.08%. Fatal crashes with female drivers totaled 15,130, and 17% of the women involved blew a 0.08% or higher.

Women are also less likely to cause fatal speeding-related crashes than men. Speeding was a factor in 29% of all traffic fatalities in 2021, according to National Safety Council (NSC) data. U.S. drivers pay an average of $187 for full coverage, but rates jump to $242 with a speeding ticket.

Overall, men cause nearly 41% more car accidents than women, according to the most recent National Highway Traffic Safety Administration (NHTSA) data. Insurance companies consider this risk factor when determining car insurance rates, as it increases the likelihood of a claim.

The oldest and youngest drivers have the largest price gap by gender

Gen Z and Baby Boomer drivers have the largest gender pricing gaps for car insurance among different age groups. Car insurance rates tend to be highest for teen drivers. Rates typically decrease as young drivers gain more experience behind the wheel.

Auto insurance rates start rising again for older drivers, usually after age 70, as the age-related decline of vision, motor control, and mental reaction time increases driving risks. Involvement in fatal accidents steadily falls until age 65, then rises slightly over the next decade of life, according to NSC data.

50 years after equal loan rights, women pay more to finance cars

Lenders had the right to deny women loans and charge higher rates based on their sex until Congress passed the Equal Credit Opportunity Act (ECOA) in October 1974.

In 1976, the ECOA expanded protections against lending discrimination based on sex and marital status to include race, color, national origin, age, recipients of public assistance income, and people who exercise their rights under consumer protection laws.

But auto loan gender discrimination didn't disappear overnight. Two years after the act passed, a senior vice president at a Kansas City bank told The New York Times he would take the fact that a woman had young children into account when considering her loan application "because if the children were sick, the wife might have to stay home from work to take care of them."

Single women also had difficulty securing loans without male co-signers. A "young woman who was pretty" faced extra scrutiny because "she might get married and get pregnant," a Seattle banker told The Times.

Women have a much easier time securing auto loans at fair rates today. But there's still a slight pink tax on dealership financing interest rates, according to the 2022 study "Inequalities in Dealers' Interest Rate Markups? A Gender and Race-based Analysis."[1]

Women experience markups of 0.6%, or 0.73 basis points, on dealership auto loans, the study found. The gender gap is low on an individual basis, amounting to an additional $9 for women over five years. Still, U.S. dealer markup for female car buyers adds up to $40.3 million annually.

The financing gap is only significant in Republican-voting counties, which the study notes may be "markets where men are likely to view women's progress as a barrier to their success." About 38% of Republican men say women's gains have come at the expense of men, compared to 19% of Democrat men, according to Pew Research polling.

Men own more cars than women as vehicle prices rise

The gender gap in vehicle ownership is small but growing, according to Insurify data. More men have owned cars than women for the past five years, except in 2022, when ownership rates were equal. The gender difference in car ownership remained at 1% during 2020, 2021, and 2023, but early data from 2024 shows the gap widening to 3%.

Surging new vehicle prices could contribute to the widening gender divide. A new vehicle costs an average of $48,759, which is $8,336 more than in December 2020, according to Cox Automotive.

Men make an average of $62,350 annually, and women make $52,360, according to NWLC data. As vehicle prices rise, car ownership becomes increasingly unaffordable on an income of $52,000.

Auto repair shop discrimination fuels women's distrust

Navigating car repairs and maintenance can be challenging for women, who are sometimes met with condescension or price gouging when they take their cars to the shop. Only 15% of women fully trust their auto mechanic compared to 32% of men, according to a 2023 ConsumerAffairs survey.[2]

"My car is European and a manual with a turbo, so it needs special maintenance and high-grade oil," says Sara Getman, an associate editor at Insurify. "Every single time I've gone to get an oil change, I've been questioned on if it's what I actually want. Same with gas. I've had men ignore me and put in lower-grade gas, which can seriously mess up my engine. The only time I've ever felt acknowledged or comfortable was when I had a female mechanic."

But finding a female mechanic can be difficult. Women accounted for only 9.3% of automotive body repairers, service technicians, and mechanics in 2023, according to the U.S. Bureau of Labor Statistics (BLS).

The percentage of female mechanics dropped to 2.4% in 2020. During the COVID-19 pandemic, 2.5 million women left the workforce versus 1.8 million men. In December 2020 alone, women accounted for 86.3% of the 227,000 job losses, according to BLS data. But the number of women in the automotive industry is climbing again, up by nearly 41% between 2022 and 2024.

Insurance costs are rising regardless of gender

Auto insurance rates skyrocketed 24% in 2023, straining driver budgets irrespective of gender. Insurify predicts an additional 7% increase in 2024, making it essential for everyone to understand and manage their insurance costs.

A key factor behind men's higher car insurance costs is their accident rate. Maintaining a good driving record by avoiding risky behaviors like speeding and driving under the influence can help all drivers secure a lower rate. Many insurers offer discounts for taking approved defensive driving courses.

Men face higher car insurance rates, and women pay more of their income toward coverage, but both can benefit from comparing car insurance quotes from multiple insurers to find the best rate.

Methodology

To explore how gender affects car insurance rates in 2024, the data science team at Insurify turned to its proprietary database of real-time insurance quotes from partner carriers. When users apply for car insurance through Insurify, they enter information about themselves necessary to receive an insurance quote, including their gender, age, credit, state of residence, vehicle, and driving history. At the state and national levels, the Insurify team compared median insurance rates for male and female drivers over the past year, controlling for age, driving record, credit, and vehicle. Unless otherwise noted, rates in this report represent the median price for a driver between the ages of 20 and 70 They also used this dataset to explore the gender breakdown in vehicle choice, vehicle ownership rates, and more.

Earnings data by state for men and women come from Q4 2023 research by the National Women's Law Center. To compare car insurance spending between men and women, Insurify data scientists calculated the proportion of yearly earnings that the median man and woman are spending on car insurance in every state.