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June 28, 2024

How do insurers set rates for gender X drivers?

2 min read


Since 2017, individuals who do not identify as male or female may list themselves as gender X on Ontario identification.  This has stirred up some serious conversation on potential impacts in changing one’s gender marker – including how car insurance and insurance rating may be impacted.  

Auto insurance rates are influenced by a lot of things, but your gender is a major influence. How does that change if you’re a gender X driver? 

What is the gender X option for driver’s licenses in Ontario?

Gender X is an option for individuals to put as their gender marker on Ontario ID, including driver’s licenses. This was done as an effort to support Ontario citizens’ gender identity, inclusivity, and diversity. Changing your gender marker can be done for free. To change your sex designation on a driver’s license, visit a ServiceOntario center. There is no fee or additional requirements to doing so.  

Rates for different genders

Your gender is just one of several factors which can influence your auto insurance rate. Insurers set rates based off a driver’s risk profile, which is calculated using a database of claim statistics. The more claims associated with a specific demographic, the higher the rates will be for that group. 

Rates fluctuate with time as insurers observe changes in claim frequency with different demographics. Where one demographic may be historically higher regarding claims, another might exceed them in a couple of years. Insurance prices are always changing to reflect this. 

Why do male drivers have higher insurance rates?

Male drivers are statistically likelier to file claims than female drivers. This has been observed by virtually all insurance companies, and is also reflected in our list of best car insurance companies for young drivers, which examines how different the ratings are between men and women aged 25 and under. 

The gap is much larger between younger men and women, as men 25 and under are statistically the most at risk of making a claim. They have less experience and tend to partake in riskier behaviours that could result in an accident or collision. 

How are car insurance prices set for gender X drivers?

Currently, there are no guidelines in Canada for how insurance companies are to set rates for gender X drivers. Some insurers may offer rates like what female drivers would see, where other carriers will use an average between male/female rates. 

Each insurance company handles ratings for different demographics in their own way. To find the best auto insurance rates as a gender X driver, work with a broker and consider multiple providers to get the best bang for your buck. 

Is using gender to determine car insurance rates unfair?

Pretending to be the opposite gender for lower car insurance rates isn’t an unheard-of practice, and drivers may feel tempted to lie to cut costs. But this counts as auto insurance fraud and insurers have the right to cancel a policy if someone has made fraudulent claims or misrepresented themselves.  

Using gender to determine car insurance rates is not a new concept, but it is starting to be contested more and more. Why? Because good drivers can find themselves paying inflated costs simply because they’re male, even if they’ve never filed a claim.  

Regulators permit insurers to use gender as a rating factor, and that data shows that there are gender differences with respect to risk. However, as technology evolves, insurance companies are discovering new ways to evaluate driver habits that are not based solely on non-behavioural data. Telematics is an example of this.  
Although this hasn’t happened in Canada, many states in the U.S. are banning the use of gender as an underwriting factor altogether. California, for example, banned gender as a rating factor after a state law introduced a “nonbinary” option, deeming it unfair to assign those individuals a gender rating. 

Finding affordable car insurance with Mitch – regardless of how you identify

Regardless of the gender marker on your driver’s license, it’s imperative for drivers of any background, gender identity, experience, age, etc., to find affordable car insurance. Mitch is an insurance brokerage in Ontario that helps all drivers shop around and compare coverages from the top insurance carriers in Canada, searching for the best policy for their individual needs. Give us a call and get a free no-obligation car insurance quote today. 

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