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Car Insurance Charges and Gender and Age Factors Essay

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Updated: Apr 14th, 2021

One of the many understood facts about life is that human beings gradually become old. After the vitality and naivety of early life, there comes wisdom and weariness of old age. Most of the things fluctuate in the course of a person’s lifetime, for instance, physical strength, love concerns, and net worth, to mention a few (Ayuso, Guillén, & Pérez-Marín, 2014). Some people have coined the saying that only a couple of things are indisputable- taxes and death. It is reasonable for insurance companies to charge young male drivers much higher rates until they turn 25.

Insurance companies charge varying rates to dissimilar groups of drivers, particularly the male and youthful ones. Gender and age are the two main aspects that influence car insurance charges. The two factors can result in a young male driver paying as high as 50% more for insurance when judged against a female one (Ayuso, Guillén, & Marín, 2016). This is because young male drivers are considered high-risk and unskilled (and it is truly so). On this note, young male drivers pay the highest insurance rates not just in the US but across the globe.

Studies show that young male drivers have the highest likelihood of being irresponsible behind the wheel than any other category of drivers. In reality, research has established that inexperienced drivers (predominantly the young and males ones) have a high probability of filing a claim or getting a traffic infringement, for example, a speeding ticket (Ehsani et al., 2015). In this regard, the majority of insurance companies prefer that drivers wait until they attain 25 years of age for them to start paying normal adult insurance rates.

Although young drivers are charged a high premium, they are just getting into the labor force and have a low likelihood of affording costly insurance. On average, it may appear illogical that a 21-year-old male driver is anticipated to pay nearly twofold the rate that a 26-year-old driver is charged for similar car insurance (Allen, Murphy, & Bates, 2017). However, though young male drivers below 25 years of age are either entering into employment or beginning to work their way up the rank, they should be charged more because they have a higher possibility of being involved in accidents or intentionally going against traffic rules than their older counterparts. This is a factor that insurance companies consider while determining how high risk is to ensure young or older drivers.

Anchored in the insurer’s facts and earlier experience having insured other drivers, it is evident that the greater is the number of years that a driver has been driving, the less probable it is that she or he will be involved in an accident and claim for compensation. This characteristically insinuates that it is less risky to insure drivers above 25 years old, which translates to a cheaper rate (Ehsani et al., 2015). Nevertheless, the moment drivers turn 60 years old, the tendency starts to gradually reverse because old age and sluggish reflexes have a negative effect on driving. Therefore, insurance companies again begin to charge drivers more once they turn 70 years old.

It is sensible for insurance companies to charge young male drivers high rates until they turn 25 years old. Gender and age are the key aspects that sway car insurance charges and may result in a young male driver paying even 50% more than a female one. There is a minimal risk in insuring drivers above 25 years old, which results in a cheaper rate.

References

Allen, S., Murphy, K., & Bates, L. (2017). What drives compliance? The effect of deterrence and shame emotions on young drivers’ compliance with road laws. Policing and Society, 27(8), 884-898.

Ayuso, M., Guillén, M., & Marín, A. M. P. (2016). Using GPS data to analyze the distance traveled to the first accident at fault in pay-as-you-drive insurance. Transportation Research Part C: Emerging Technologies, 68, 160-167.

Ayuso, M., Guillén, M., & Pérez-Marín, A. M. (2014). Time and distance to first accident and driving patterns of young drivers with pay-as-you-drive insurance. Accident Analysis & Prevention, 73, 125-131.

Ehsani, J. P., Li, K., Simons-Morton, B. G., Tree-McGrath, C. F., Perlus, J. G., O’Brien, F., & Klauer, S. G. (2015). Conscientious personality and young drivers’ crash risk. Journal of Safety Research, 54, 83-129.

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IvyPanda. (2021, April 14). Car Insurance Charges and Gender and Age Factors. Retrieved from https://ivypanda.com/essays/car-insurance-charges-and-gender-and-age-factors/

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IvyPanda. 2021. "Car Insurance Charges and Gender and Age Factors." April 14, 2021. https://ivypanda.com/essays/car-insurance-charges-and-gender-and-age-factors/.

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IvyPanda. (2021) 'Car Insurance Charges and Gender and Age Factors'. 14 April.

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