Women pay more for car insurance, report says
6th April 2021 · 0 Comments
By Meghan Holmes
Contributing Writer
Women in Louisiana pay more for car insurance than men despite statistics illustrating that women are safer drivers, according to a new study from the Zebra, an insurance comparison website.
On average, Louisiana women pay $68 more per month than men, regardless of driving record. Groups advocating for insurance reform and some Louisiana legislators are increasingly pushing for non-driving related factors, like credit score and gender, to be removed as factors impacting car insurance rates as a way to lower prices.
“We have a steep female driver penalty that isn’t backed up by facts,” said Eric Holl, executive director of Real Reform Louisiana, a nonprofit that works to expose the real causes of high insurance rates and advocates for reform. “Women are less likely to speed in a way that causes a serious accident, and less likely to drive drunk. I don’t think it’s a huge coincidence that four of the states with some of the lowest car insurance rates have banned the use of gender as a factor in rates. There’s also no evidence that limiting these factors will increase the cost of insurance across the board.”
The Zebra’s study examined more than 83 million rates to explore pricing trends across the United States, using a standard driver profile (with the same car, driving history and coverage requests) and changing the age and gender to look at how rates shifted. Louisiana has one of the larger disparities between what women and men pay, particularly when looking at middle-aged people. Louisiana women in their fifties pay $118, or 5.6 percent, more than men their age, fourth from the bottom when all the states are ranked.
According to data compiled by the Insurance Institute for Highway Safety, men behind the wheel, regardless of age, consistently account for around 70 percent of all driver crash involvements, about 70 percent of driver deaths, 79 percent of drunk drivers involved in fatal crashes, and 79 percent of drivers in speed-related fatalities.
So why do women pay more? The study’s results are inconclusive. Holl points to Louisiana’s relatively large wage gap (what women earn on average compared to men) as a potential part of the problem.
“We know insurance companies will try to entice wealthy policy holders, because they’re generally more profitable,” he said. “They’re more likely to buy homeowner’s insurance, or they might have two homes and a boat, or an RV, or life insurance. They are more likely to buy these other lines of policy that generate higher profit margins for these companies. Part of it is also that rich people are less likely to use their insurance, so poor people in part get penalized because they are more likely to actually use the product they’re paying for.”
As a result, a high credit score could result in a better rate for a driver with a DWI when compared to a low income driver without credit who has a perfect driving record. In Louisiana, insurance rates are overseen by the state’s Department of Insurance. The department’s commissioner, Jim Donelon, testified before Louisiana legislators last summer and argued that, “gender discrimination is fair discrimination.”
Holl from Real Reform Louisiana points to this attitude as another part of the reason why women pay more in the state. “We have a commissioner who is not interested in protecting consumers and works on behalf of companies, and we have no transparency with how rates are set,” he said.
Some state legislators would like to change that.
In late March, state Sen. Jay Luneau, D-Alexandria, introduced legislation to make gender and other non-driving related factors that determine car insurance, including credit score, illegal. The bill awaits review in the Senate’s Committee on Insurance. Currently, seven states (Michigan, California, Hawaii, Massachusetts, Montana, North Carolina and Pennsylvania) ban gender as a rating factor in car insurance.
Real Reform Louisiana also hopes to introduce other insurance-related legislation later this session connected to hurricane damage and home insurance claims.
“We need to make big insurance companies play by the rules and live up to their end of the bargain in terms of how insurance is supposed to work, and we need to stop these shady business practices that insurance companies use to take advantage of regular people. Until that happens I always tell everyone to shop around. There are better companies out there that either don’t use non-driving factors, or use them to a lesser degree, and right now that’s the only way to make them change,” he said.
This article originally published in the April 5, 2021 print edition of The Louisiana Weekly newspaper.
