Overseas Auto Insurance Debate Highlights US Ratings Issues

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The question of whether insurance providers can use gender in determining rates has started debate in Europe. Online Auto Insurance discusses the use of different variables in setting U.S. auto insurance rates and what people in higher-risk categories can do in order to get the cheapest premiums.

An intense debate was sparked overseas this week as the result of a European Court of Justice official’s request that the court consider whether auto insurance companies’ and other types of coverage providers’ use of gender to help determine rates violates anti-discrimination rules. News of this debate may have policyholders across the Atlantic wondering, “Does American law allow my insurer to consider gender when determining premiums?”

Unless a driver obtained coverage in the state of Montana, the answer is yes. The factors considered legally admissible in premium-calculation formulas are set by states, and 49 of them as well as the District of Columbia allow insurance companies to take gender into account when determining how much a policyholder will pay for coverage. Although the sole fact of being a male won’t go so far as to push a driver in the high risk car insurance category, rates often do come out significantly higher for men when compared to rates for women with other identical risk factors. And there’s pretty good reason for this.

Insurers collect and consider a wide variety of personal data when determining how much risk a prospective policyholder poses. If certain variables associate a driver with categories of motorists whose driving statistics indicate that they are more likely to file a claim than those in other categories, the insurer is likely to adjust rates upward. As it happens, statistics show that males — particularly younger males — in the U.S. tend to have higher crash rates.

According to data from the National Highway Traffic Safety Administration, there were approximately 9.98 million drivers involved in all crashes that year. Of those crashes, about 58 percent involved male drivers, while about 42 percent involved female drivers.

Source: http://www-nrd.nhtsa.dot.gov/Pubs/811170.pdf

Insurers may likely interpret this data to mean that they should consider male drivers to be a slightly higher risk.

Since there are ostensibly no current legislative efforts to change this in America, the only remaining recourses for male drivers are to keep driving records clean and to comparison shop for coverage.

To learn more about finding insurance for higher-risk drivers, consumers can go to http://www.onlineautoinsurance.com/learn/high-risk-drivers.htm where visitors can comparison shop with the free online quote generator.


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John Pirro
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