While insurance plans can be very similar, they can cost vastly different amounts between people. Insurance companies determine the cost of each plan depending on the individual they’re protecting and the exact plan the customer wants. Two factors that can have a big influence on the insurance premium someone pays every month are gender and age. Learn more about how insurance rates vary depending on age and gender to better understand what this means for you.
How Insurance Determines Rates
The main thing companies consider when determining the cost of your insurance premium is the risk they take on by insuring you. The more you want them to cover and the more likely you are to be in an accident, the more your insurance is going to cost. There are dozens of factors that can influence your risk, such as previous driving records and the vehicle you’re driving. However, gender and age are also part of the risk factor equation each company runs.
Gender Affecting Rates
Between age and gender, the most impactful factor is the gender of the driver. Statistically, men are more likely to get in accidents or damage their vehicles, which means they’re a higher risk for the company. You can see this in play with more than just insurance rates, as more men are on SR-22 insurance for a variety of reasons.
The Effect of Age
The difference in gender does drop off as time wears on, as the difference in risk lowers significantly by the age of 25. Gender is only an important factor for young drivers. Additionally, age works on an inverse bell curve, with rates initially lowering and then hiking back up as age increases. While age does not have as big of a role for most of a driver’s life, both age and gender impact your insurance rates and the rates of everyone.
Understanding how insurance companies factor these rates can help you understand what to expect when purchasing insurance. Additionally, you should recognize that other things can help mitigate these higher costs, such as taking safe driving classes or upgrading your vehicle with more safety features.
