Young men with clean driving records must pay significantly more than young women for auto insurance, simply because of their gender. As a result, many young men cannot afford to drive, severely limiting their opportunities for employment, education, recreation and travel. And young men who can afford the insurance pay a penalty for their gender--a penalty institutionalized by state laws requiring auto insurance. This discrimination against young men is unconscionable, and should be illegal.
Auto insurers should only be allowed to vary rates according to factors such as type of car, age of driver, accident record, output from any driving monitoring device under the hood, and number of miles driven per year (or a proxy, such as number of gallons of fuel purchased).
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Another injustice is occassional drivers pay the same rates as frequent drivers.
I drive about 3,000 miles a year and pay the same as if I drove 30,000. It should be obvious that my risk is 90% less.
The reason for this is that insurance rates are massively regulated. Insurance companies have plenty of data to more accurately price their insurance to individuals. Insurance should be based on two factors - your likelihood to incur a liability to the insurance company, and the size of that liability.
Thanks for your comment. The two factors you mention (probability of accident and size of accident) can be fairly assessed by the factors I listed in my second paragraph. There is no need to discriminate against young men.
I think younger men are statistically more likely to have an accident...like us old guys. But I think another way the system would be more fair is if the required liability insurance went with the driver, rather than linking the driver with a particular auto. I'd like to have a sedan for regular use, and an old truck for occasional use for hauling lumber or whatever. But that privilege would almost double my annual insurance cost, and I'm living on Social Security. So I'm stuck with the old truck. I would be happy to accept responsibity to determine that anyone driving my second vehice have valid liability insurance. And they should be paying for it, not me.
In Europe, it is currently proposed to legislate against this perceived (but statistically fair) discrimination.
I also think it's wrong to discriminate against young men because of gender. I think every young adult should be start out their insurance based on the vehicle for their first year of driving. And after they have driven for a year, review their driving record and base their insurance off of that. I have gone the 7 years of my driving record with no accident or speeding ticket, why should I have to pay more than a girl the same age who has had wrecks or tickets? Women speed and have just as many wrecks as guys if not more.
In Britain, and in most other European countries, insurance is based on the driver and the car.
You also have "no-claims bonus". If you don't make a claim (or nobody claims against you), you get a %-age discount, which goes up with every claim-free year until it reaches 60%!
OK, young males are statistically more likely to have an accident than other groups, therefore on average cost the insurance companies more, therefore the insurance companies charge more.
But there are ways to cut down the cost:
- Drive a cheap slow car. Powerful cars have more accidents (and cause more damage to other cars), and expensive cars cost more to repair, therefore the insurance companies charge more for them.
- Insure yourself for your own car only. Insuring your car for "any driver", or yourself for "any car" is more expensive.
- Insure yourself "third party fire and theft" only, instead of "fully comprehensive". This means you only pay for damage to the other vehicle and other people (which is what you legally have to be insured for). If your own car is damaged, hard luck, you have to pay yourself.
- Have a "low mileage" policy. You have to sign that you will do less than xxx miles/Km whenever renew the insurance.
- Drivers in high-risk categories or with bad records, especially people with drink-driving convictions, pay a lot more.
Most young people and new drivers start with minimum insurance, and add options and switch to "fully comprehensive" after they have built up a "no-claims bonus".
Don't you have these options where you live?
I agree this is a discrimination. I see three main components in driving insurance :1 driver2 vehicle3 traffic system (we often forget this is a major risk factor, too).
1 the driver's risk : track record, age, gender, mileage (lower mileage means lower exposure, but also lower experience...)2 the vehicle's risk : power, weight, safety features, condition3 traffic system risk : road condition, traffic density, risk rate of other cars and drivers in the area where you drive.
Viewing these factors, I think we have to find out just how much of he risk we want to insure is really individual, and how much is collective.
All people should be able to participate in traffic, where the collective risk should be payed for, partly by the government, partly by all participating drivers. This would be a fixed amount, accounting for the common risk. It would have to level out age and gender differences in a fair way. If you want to take personal risks on top of that, like having a more dangerous car, speeding, travelling many miles... you would have to be charged accordingly.
I know this may seem vague, but I'm not an expert in the matter. I only think insurance is all about spreading risks over a large number of people.
If we continue going in the other direction, we might end up in a situation where it will be cheaper to forget about insurance and just pay whenever you have damage.