Women get paid less; but at least we get cheaper car insurance…

March 2, 2010

mason-Rachel Mason is public relations manager at independent financial service providers Fair Investment Company.The opinions expressed are her own.  Reuters will host a “follow-the-sun” live blog on Monday, March 8, 2010, International Women’s Day. Please tune in.-

In this day and age, it seems that things are pretty much equal between the sexes; men and women have equal rights, and in theory, can do the same jobs, so why is it that when it comes to money, the gender gap still exists?

Currently, the difference between what men and women earn is a staggering 22 pe cent. Women have to pay more for pensions because they live longer. So, it seems, one of the only financial advantages we seem to have over men is car insurance.

Men moan about this fact, and claim it is not fair that they should pay more to insure the same vehicle than a woman, but, unlike the gender pay gap, which could be construed as wholly unfair, the car insurance gender gap is more justifiable – women get cheaper car insurance because they have fewer accidents. Fact.

Many men would claim this is not true, and that they have fewer accidents than women, but that depends on your definition of ‘accident’. Women may have more minor bumps and scrapes than men, but men win hands down when it comes to serious accidents that cause more damage and therefore, cost more money for car insurance providers.

Home Office statistics reveal that men cause 89 percentof all serious driving offences. Men are responsible for 94 percent of death by dangerous driving offences, 97 percent of dangerous driving offences and 91 percent of offences caused as a result of drink or drugs. Men are also responsible for 86 percent of speeding offences and 85 percent of accidents as a result of neglecting traffic signs, directions and pedestrian rights.  And it is these types of accidents that affect insurance premiums.

According to Moneysupermarket.com, men pay, on average, 71 percent more for their car insurance than women. The average premium for a man is £886, whereas women pay £517 on average – £369 less than their male counterparts. And the gap is even bigger for younger drivers; 18 year old men pay £2,318.83 on average, where as 18-year-old girls pay a staggering 87 percent less at £1,237.33 on average.

But is this fair? Yes, says women’s car insurance specialist Sheilas’ Wheels which was set up in 2005 specifically to cater for women.  “We found that women claim less, are responsible for far fewer driving convictions and have attitudes towards cars, driving and other road users that are often more considered than those of their male counterparts,” said the website. “We wanted to reward these differences and decided that we needed a new brand and a whole new look for car insurance for women to make it happen.”

But Steve Sweeney, a male driver, who is also head of motor insurance at Moneysupermarket says men are getting a raw deal. He thinks it is not fair that premiums should be dictated by age and gender and unfortunately for women it seems Steve may soon get his way because it seems this one financial advantage we women do have may be slowly slipping away.

Car insurance premiums are on the rise, particularly for women. While the average premium rose by 12.7 percent in 2009, women aged 21-30 saw an insurance of 17 percent on average compared to men of the same age who saw an increase of 13 percnet. While an 85-year-old woman would have to pay £375 to insurance her Renault Clio with AA car insurance , a 55-year-old female could be insured on the same vehicle for just £186.

So it seems that the car insurance market isn’t going to do us any favours, and the only way to hang onto these cheaper deals is by continuing to be safer drivers than men right into old age!

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