Why Is It Legal to Charge Men More for Car Insurance?


If you’re a man, there’s a good chance you’ve paid more for car insurance than women, simply because you’re a man.  And if you’re a woman, chances are you’ve enjoyed lower insurance rates simply because you’re a woman.

But why is this kind of gender discrimination okay in modern times, when we’re all supposed to be equal under the law? Read on to find out.

A brief history of discrimination law

Before the Civil Rights Act of 1964, private businesses could discriminate against customers and employees for any reason.  And, indeed, they did, usually for racial reasons.

Title II of the Civil Rights Act put an end to businesses’ right to discriminate against certain customers.  Specifically, it forbid certain types of privately-owned businesses open to the public from discriminating against customers based on “race, color, religion, or national origin,” but the act did not say anything gender. Businesses not open to the public, like private country clubs, were exempt.  Title VII of the Civil Rights Act did mention gender, but it only applied to employer-employee relations, not business-customer relations.

After the Civil Rights Act of 1964, a bevy of other discrimination laws were passed by the federal government and states, some having to do with gender, but also extending protection to pregnant women, disabled people, military personnel and others.

So why are insurance companies allowed to discriminate based on gender?

The answer is because (almost) none of the existing laws forbid it.  Insurance companies aren’t like public lunch counters or sports stadiums, so Title II of the Civil Rights Act of 1964 doesn’t apply, and the Act doesn’t mention gender in Title II anyway.

Montana is a rare exception because it does have its a law that explicitly prohibits auto insurance discrimination based on gender.  But in most other states, without any laws stopping them, insurance companies are free to price male insurance higher because men statistically have a higher risk of accidents.

Is it fair to charge men more for auto insurance?

In a sense it is fair, because if gender discrimination were outlawed women would have to pay higher rates to cover the opposite sex’s more reckless behavior.  On the other hand, it’s not fair because dangerous women drivers enjoy a discount they don’t deserve, and safe male drivers pay for the recklessness of their entire gender.  Regardless, to a certain extent unfairly lumping in people with larger groups is inevitable, because, after all, that’s what actuaries do and that’s how insurance companies turn a profit.

If you don’t like it, change the law

Ultimately insurance gender discrimination is possible because there are no laws to stop it, so if you feel slighted, blame your fellow citizens and the law makers they elect.  There is nothing stopping your state legislators from following Montana and outlawing auto insurance gender discrimination.