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Why women pay less for insurance

Posted by on Feb 28, 2012 in Insurance, Moneyville | 0 comments

By Sheryl Smolkin

Read this article and comments at Moneyville.ca 

Laides, if the man in your life gives you a hard time because you spend more than him on clothes or shoes, I’ve got the perfect comeback.

Based on a study from insureye.com, he pays more for auto, home and life insurance. In fact, the data reveals that on average men in Canada pay 5 per cent more than women for auto insurance, 8 per cent more for home insurance and up to 25 per cent more for life insurance.

Tickets or automobile-related convictions are one factor that influence the cost of auto insurance. When people asked for insurance quotes on the kinetix.ca website in 2010, the top five infractions disclosed were:

•    Speeding less than 45 km/hr over the posted limit
•    Failure to obey traffic sign/signal
•    “Other” minor conviction
•    Failure to wear a seat belt
•    Failure to carry/produce evidence of insurance

In all cases there were a significantly larger number of male offenders.

The severity of accidents and resulting claims payouts are also factored into insurance premiums. Statistics Canada data confirms that men not only have more motor vehicle accidents, but they have a much higher accident death rate (2004: men: 13 deaths/100,000 population; women: 5 deaths/100,000 population).

The net result is that the average monthly automobile premium across the country is $123 for men and $117 for women (Ontario: $151 vs. $146).

Related: Bad Ontario drivers pay Canada’s highest insurance rates

Differences in home insurance premiums are mostly driven by home value. The average monthly premium for home insurance paid by Ontario men and women is virtually the same, but nationally men pay $77/month while women pay only $71/month.

Insureye.com co-founder Alexey Saltykov suggests the gender-based home insurance premium gap could be linked to the continuing disparity between wages for men and women. “In 2008 women working full-time earned only 74.1 per cent as much as their male counterparts. This suggests that some men can afford more expensive homes.”

Related: Home insurance didn’t cover self-storage break-ins

When it comes to life insurance, the average premium for men overall is $71/month vs $57/month for men (in Ontario, $81/month vs $66). The key factor influencing premium levels is women’s longer life expectancy According to Statistics Canada (2006-2008) men live an average of four years less than women (age 79 for men and age 83 for women). Although the seven year gap between male and female life expectancy of 25 years ago is closing, insurance companies still view women as a lower risk customers than men.

Related: Why life insurance is a must for parents 

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