[Asia Economy Reporter Changhwan Lee] In the United States, insurance companies have been found to charge higher car insurance premiums to women than to men. As controversy over gender discrimination arose, some states enacted laws to prohibit this practice.
In contrast, Korean insurance companies primarily differentiate car insurance premiums based on driving experience or accident history rather than gender.
According to the report "Gender-Based Car Insurance Premium Differences in the United States" published by the Korea Insurance Research Institute on the 18th, as of last year, American women paid on average $6 more in car insurance premiums than men.
This is due to the differential premium charges by U.S. insurance companies. In the U.S., a total of 43 states allow gender as a factor in calculating car insurance premiums. The difference in premiums by gender varied by age and state, with a maximum difference of 7.6%.
Although women in the U.S. bear higher car insurance premiums than men, the incidence of drunk driving and serious accidents was about 2.9 times higher among men than women.
As the situation persisted where men paid less in premiums but had a higher accident rate, controversy over the legitimacy of gender-based car insurance premium differentiation continued within the U.S.
Consequently, seven states including California, Michigan, and Hawaii banned gender-based car insurance premium differentiation, and recently, a bill with the same content was submitted to the Senate in Delaware based on research results from the Delaware insurance authorities.
According to reports from the Delaware insurance authorities and the U.S. Consumer Federation, most major insurance companies in Delaware also charged women car insurance premiums that were on average 8-9% higher.
The report showed that while the proportion of female residents and drivers in Delaware was higher than that of males, the accident rate was higher among men, and argued that gender-based premium differentiation lacks justifiable grounds for such discrimination.
Unlike the U.S., Europe and Korea generally do not discriminate in car insurance premiums based on gender. In Europe, gender-based car insurance premium differentiation is prohibited. The European Court of Justice ruled in 2012 that calculating insurance premiums based on factors beyond an individual's control, such as gender and age, is prohibited.
Korean insurance companies also do not use gender as a criterion when calculating car insurance premiums. Instead, driving experience, past accident history, and frequency of insurance claims are the main criteria for premium calculation. However, men may receive recognition for military driving experience, and women may have special provisions such as pregnancy-related riders.
Son Minsook, a researcher at the Korea Insurance Research Institute, stated, "In the U.S., on average, women pay higher car insurance premiums than men, but men have higher risk tendencies and accident rates, making gender-based premium differentiation a contentious issue," adding, "In the future, it is necessary to actively reflect individual driver characteristics rather than collective traits such as gender when calculating car insurance premiums."
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