Insurance companies determine rates by assessing their risk when they insure an individual. It's not personal; they use statistics about other people that share the same traits then apply algorithms to come up with the probability that the insured person will be involved in an accident.
So, a past history of being at fault in an accident could result in higher car insurance rates. There are other important factors, as well. Age, post code, type of vehicle, driving experience, and gender all play a part in how auto insurance companies come up with a quote.
How statistics about gender affect auto insurance rates
Men get caught not wearing seatbelts, failing to follow traffic signs, and driving faster than the posted speed limit more often than women. Accidents involving male drivers tend to be more serious, as well. For these reasons, insurance companies feel justified in charging male drivers more for car insurance than female drivers.
In 1992, the Supreme Court of Canada affirmed insurance companies' right to include gender, marital status, and age among factors that help determine car insurance rates. They also encouraged insurance companies to look for other ways to calculate the risk that a driver would be in an accident.
Not all men
Fortunately for many drivers, gender is a factor when setting insurance rates only until age 25. There are other factors within the driver's control that have a more profound effect on insurance rates. Male and female drivers can get the best insurance rates by maintaining a clean driving record.
Driving record affects insurance rates more than gender
Even small convictions for imprudent driving, failure to obey traffic signs or speeding, can cause an insurance rate increase. Serious convictions cause insurance rates to spike. These include distracted driving, careless driving, speeding in a construction or school zone, passing a school bus when its lights are flashing, driving without insurance, and speeding 50 kilometres or more above posted limits.
If convicted of a serious driving infraction, insurance rates could go up 100 percent or more. The first minor conviction might not impact future insurance rates, but the driver will lose their eligibility for conviction-free insurance discounts. Two or more minor convictions could increase rates 20 percent or more for each incident, depending on the insurance company.
Convictions stay on a driving record for three years from the date of conviction-not the date that the driver got the ticket. They can have an adverse effect on insurance rates for the same amount of time. When the conviction falls off the driving record, insurance rates should drop upon policy renewal.
Car insurance rate increases in Ontario must be approved by the Financial Services Commission of Ontario (FSCO), so while it may seem unfair that male drivers under the age of 25 pay more for insurance than their female peers, the rate differences based on gender are supported and approved by the FSCO.
Aside from keeping a clean driving record, the best way to control auto insurance rates is to shop around. Canada has a competitive insurance marketplace, making it possible for drivers to get a fair rate on auto insurance no matter their gender.