The Role of Age and Gender in Auto Insurance Rates
Ever wondered why your car insurance rate doesn’t look the same as your neighbor’s? Or why your younger cousin gasped at the quote they got? It’s no secret that insurers rely on a variety of factors to calculate your premium, but two of the most influential ones are age and gender. These factors are key players in determining your risk as a driver, and in turn, they have a big impact on your wallet. Understanding how factors affect car insurance rates work is essential if you want to make sense of your monthly premium.
Even though many states are moving away from using gender as a factor in setting quotes, some still do, so it is important to understand the ins and outs of these important items.
The average car insurance rates by age and gender can feel especially tricky to navigate. Why, for instance, do teens pay so much more? And why do men often see higher rates than women in certain age groups? You deserve good coverage at a fair price, no matter who you are.
Are Age and Gender Key Factors in Auto Insurance Rates?
There is no doubt that age and gender are factors in the cost of auto protection in most states, but their impact is not equal. A driver’s age is one of the most important factors that help determine what they ultimately pay for coverage, but the same is not always true for gender.
While driver age continues to be a prominent indicator of what these monthly premiums will cost, many insurers are moving away from relying on gender when making these decisions. In some cases, this is done due to state laws that prevent insurers from basing their coverage decisions on your gender.
In recent years, statistics have shown women are just as likely to have a claim as men – so it no longer makes sense to penalize one gender with higher rates/
Behind the Wheel of Rates: How Age Influences Your Cost
Age is one of the most significant factors affecting your car insurance rates, and it’s all about risk assessment. Carriers look at data to determine how likely you are to file a claim, and statistically, age plays a big role in predicting driving behaviors and accident risk.
When you’re young, especially if you’re a teenager or in your early twenties, you’re considered a high-risk driver. This isn’t personal; it’s based on statistics. Younger drivers are more likely to engage in risky behaviors behind the wheel and often lack the experience to avoid road hazards. That is why, according to the Insurance Institute for Highway Safety (IIHS), teen drivers are three times more likely to be involved in a crash than motorists over the age of 20. Because of this, your premiums as a young driver can be significantly higher than those of older, more experienced drivers.
As you age, your rates tend to decrease, particularly in your late twenties and thirties. By this stage, you’ve likely built up more experience and demonstrated safer driving habits. If you’ve maintained a clean driving record and avoided accidents or tickets, insurers reward this with lower premiums. Middle-aged drivers, generally in their forties and fifties, enjoy some of the most affordable rates.
However, as you enter your senior years — typically your seventies and beyond — you may notice your rates going up. This increase is tied to the potential decline in reflexes, vision, and overall physical health, which can impact your ability to drive safely. While older drivers often have decades of experience, insurers factor in these age-related risks when setting premiums.
Navigating the Gender Gap in Car Insurance
Does gender affect car insurance? In most places, the answer is yes. It has long been a factor in determining auto coverage rates, with men and women often paying different premiums based on statistical differences in driving behaviors. Historically, carriers have charged higher rates for men, particularly younger men, because they are more likely to engage in risky behaviors such as speeding or aggressive driving. On the other hand, women, especially in their early years of driving, tend to have fewer severe accidents, which has resulted in lower premiums for them.
However, male vs. female insurance rates have faced increasing scrutiny in recent years. Some states, such as California, Hawaii, Massachusetts, and Michigan, have passed laws prohibiting companies from using gender as a factor in determining rates. Additionally, many companies are beginning to phase out or reduce the weight of gender in their calculations, focusing instead on factors like driving history, location, and mileage.
State Stances on Age and Gender in Insurance Rates
State laws can impact how much your car insurance is, particularly when it comes to determining how carriers can use details about you to set your rates.
Progressive Policies: States Steering Away From Gender-Based Pricing
In total, there are six states that prohibit carriers from using gender as a factor in policy pricing. These states include:
- Hawaii
- Massachusetts
- North Carolina
While some states — including Delaware — have addressed but not yet passed legislation to prohibit this practice, other jurisdictions have dropped their ban on using gender. In 2021, Montana repealed its long-standing prohibition on insurers using gender as a factor when making pricing decisions.
Ageless Coverage: The Places Where Age Makes Less of an Impact
In most states, how old you are will directly impact the cost of your car insurance. Not only that, but it is typically a major factor that carries considerable weight in determining your premium. There are two important exceptions, however: Hawaii and Massachusetts. Both states prohibit this factor from being used in setting policy prices.
Smarter Savings: Reducing Rates Regardless of Age or Gender
Regardless of your age or gender, there are ways to lower your premiums. Here are some smart strategies to save:
- Maintain a Clean Driving Record: Avoiding accidents and traffic violations keeps you in good standing with insurers.
- Bundle Policies: Combine auto insurance with home or renters’ insurance for multi-policy discounts.
- Drive Fewer Miles: Opt for a usage-based policy or low-mileage discount if you don’t drive often.
- Take Defensive Driving Courses: Completing these programs can demonstrate your commitment to safe driving and may qualify you for a discount.
- Raise Your Deductible: A higher deductible means lower monthly premiums — just ensure you can cover it in case of an accident.
- Shop Around: Compare quotes from multiple insurers to find the best deal tailored to your needs.
By focusing on safe habits and leveraging available car insurance discounts, you can reduce your costs, no matter your individual profile.
Get a Free Quote and Start Saving on Car Insurance — No Matter Who You Are
Depending on where you live, age and gender are factors affecting the cost of coverage. The good news is that there are steps you can take to reduce these costs, especially if you have a clean driving record. In some states, the law prohibits carriers from considering these factors at all.
At Freeway Insurance, we can find you the best quotes regardless of your identity. You deserve affordable coverage, and we’re here to help. Contact us to get a free quote online, call us at (800) 777-5620, or check us out in person at a Freeway Insurance location near you.
FAQ: Insight Into Age, Gender, and Car Insurance Costs
From new drivers to experienced motorists, everyone has questions about the factors affecting monthly premiums.
At What Age Does Car Insurance Typically Decrease?
While teenagers and motorists in their early 20s face the highest cost of car coverage, those rates begin to drop in most cases as people reach their early 30s.
Do Insurance Costs Rise Again at a Certain Age?
Your rates will drop as you age—but only up to a point. Once drivers reach their 70s and 80s, they can expect to see their premiums begin to increase again. This is because elderly drivers are at a higher risk of accidents compared to everyone other than teenagers.
Do Men Always Pay More for Car Insurance Than Women?
There is a common misconception that men always pay more for auto protection than women. While it is true that, statistically, men are more likely to be involved in a crash, recent trends show that women face higher premiums in 37 states, according to a study by the Consumer Federation of America.
Can Maintaining a Good Driving Record Affect Insurance Costs Regardless of Age?
One of the most important ways to save money on your auto protection is by maintaining a safe driving record. Insurers offer safe driving discounts to motorists who avoid accidents or citations.
How Does Being Trans or Non-Binary Affect Car Insurance Rates?
There is an extra layer of complexity that trans and non-binary people often face when buying auto insurance. These companies routinely ask for a person’s gender during the application process without taking into consideration non-binary people or anyone whose gender does not match the one assigned at birth.
The reality is that there is little data available to the public that explains how carriers set rates for transgender or non-binary drivers. While gender is often used as a factor when determining pricing, there are states that prohibit gender-based pricing, including California, Hawaii, and Michigan. Companies have also opted to voluntarily do away with gender-based pricing or offer more inclusive options within the application.
Which Demographic Pays the Most for Car Insurance?
In general, drivers who are 18 years old and on their own auto policy will pay the most for coverage. It is also important to note that some of the major factors that go into the cost of your policies have nothing to do with demographics. For example, having multiple accidents or a conviction for drinking and driving on your record will have an oversized impact on the cost of your auto protection.
