File Image: IOL
File Image: IOL

Why women pay less for insurance, yes you are better drivers!

By Dhivana Rajgopaul Time of article published Aug 9, 2017

Share this article:

CAPE TOWN - For South African women insurance has become necessary now that they are more graduating females, more women making strides in their work place and the breadwinners of their families. But how does the insurance industry treat women in SA?

There are insurance companies that cater directly to the the female demographic and provide car, life and home insurance at a lower rate in comparison to men. What are the reason for this?

CarInsuranceExplained, a car insurance website, explains that female drivers tend to be lower risk customers.

 According to the site, women drive a lot less than men in a year and they make a fewer claims in a year that cost the insurance company very little money.

However, the lower insurance rates only apply to women that are 25 and younger because once they turn 26 men and women pay the same rates.

Research conducted by Statistic Brain in September 2016 compared male and female drivers. 

This research shows that women are better drivers because they are less likely to commit traffic violations like reckless driving, driving whilst under the influence of alcohol and speeding.

Women have a lower risk of being involved in a car accident compared to men. Another website, Auto Insurance, states that male drivers younger than 25 stand a higher risk of being involved in a car accident than female drivers.

A Forbes article about the factors that determine insurance rates showed that premiums would be cheaper for a married woman with a university degree that had a job and owned a home than a single woman with a high school diploma that rented a home in an average income area.

There is an insurance company that specifically targets the female market: 1st for Women. They are an insurance company that “was born out of a desire to provide, for the first time, insurance specifically designed for women that would meet them on their own terms”. The company felt that there were no products on the market that were created to satisfy the needs of the female customers.

1st for women offers insurance products that are specially designed to help women such as 1st for Women Guardian Angel Assist, that will help with a tyre or battery problem and Handbag Insurance which cover up top R5 000 if a bag is ever damaged, lost or stolen.

In 2011 a European Court of Justice ruling called the Gender Directive declared that the risk factor of gender should not bring about differences in benefits and premiums. This resulted in in young female drivers paying over 25% that what they previously paid and the premiums that men were paying decreased.

South Africa has not passed any law like the Gender Directive, but if such a law was put into place then the premiums that young South African women pay would also increase just like in case of the women from Europe.



Share this article: