Car insurance: Why does my age and gender affect my premium?

By Tara McCabe ·

The reason why your age and gender affect your car insurance premium is statistics, plain and simple. 

When it comes down to it, insurance is all about risk. So when figuring out how much you should pay in premiums, an insurer will want to know how much of a risk you pose to them. In other words, how likely are you to make a claim?

Let’s break this down.

With age comes wisdom

Well not always, but facts are facts and according to a 2017 report from the Queensland University of Technology (QUT), young drivers are 60% more likely to be involved in a crash than any other age group.

Statistics from the Victorian Transport Accident Commission back this up, saying that in 2018 just less than one in four drivers who lost their lives in a car crash were aged between 18 and 25. 

QUT’s report lists a number of possible reasons why younger drivers are so at risk, some of which include a lack of experience, a tendency to drive older cars with less safety features and being generally less mature and more willing to take risks.

In Mozo’s recent car insurance report, we found that drivers aged between 16 and 20 pay, on average, a whopping $726 more than drivers aged between 40 and 49 in yearly car insurance premiums. Of course age doesn’t always equal more experience. Insurers will also take into account your driving history. So if you’re 32 and you’ve only been driving for a year, you might still have a fairly high premium.

Female versus male

Like we said above, it’s all about statistics. With this in mind, insurers won’t just look at one set of facts and figures, they’ll look at a whole bunch. So, yes age, but also whether you are female or male, what the crime rate is like for your postcode and so forth.

In 2018 there were more than twice as many males seriously injured in car incidents than females in NSW. That’s according to a 2018 report from Transport for NSW. On top of that, QUT’s report says that young males were overrepresented in fatalities as a result of car crashes in 2015.

Mozo’s research found that male drivers are quoted, on average, $90 more than female drivers for yearly car insurance premiums.

Reducing your premium

Of course while certain demographics will have an impact on what insurers will quote you, Mozo found that you can still save money by shopping around.

So why not get started by heading to our compare car insurance hub. Or if you don’t feel like clicking through just yet, check out the comprehensive car insurance policies below.

Compare comprehensive car insurance - last updated December 05, 2020

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Tara McCabe
Money writer

Tara McCabe writes across all areas of personal finance here at Mozo from banking through to insurance. Tara is expert at practical money tips, showing readers ways to live richer and be socially conscious while doing it. She earned a BA (Hons) in English Literature from Canterbury Christ Church University.