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September 6, 2017

The x-factor: Genderless auto insurance hits Ontario

2 min read


Have you opted for the ‘X’ gender option on our Ontario driver’s licence? You just might now get a lower auto insurance rate.

Earlier this year we talked about how Ontario was adding a third option, ‘X’, for unspecified to gender selection on drivers licenses. This will allow people who do not identify as either male or female to have their gender unspecified, allowing them to choose an option which better reflects their identity. This is great news for non-binary people, as it allows us to live in a society that welcomes all of us, and poses a challenge to the traditional rating system for auto insurance.

Historically, auto insurance rates in Ontario have included a rating variable for gender, and have identified gender as being one of two options: male or female. As such, all of the infrastructure from quoting software, to insurance-related documents have been built around gender being a rating variable, and there being two choices.

Better auto insurance rates if you’re x-gender?

When the news broke that Ontario was modernizing its gender classification, we reached out to our partner insurance companies to see how they will move forward and accommodate a third gender. Intact, one of the largest insurance companies in Canada, has now confirmed that they will accommodate rating for an X gender by quoting for both male and female, and offering the cheaper premium of the two. This will ensure that individuals who choose not to specify either male or female gender will not be discriminated against with higher premiums, and allow them to feel free to update their identification.

While Intact (and we expect most other insurance companies will follow soon) have found a solution to accommodate for a third gender, we wonder if this change will be the catalyst for a change in how auto insurance rates are set.

Gender has always been a controversial subject for auto insurance rating, as it was one variable that you as a driver had no control over. As auto insurance is required by law to drive your car on the road, many people have suggested that your rates should be based on risk factors that are within your control, rewarding responsible people, and charging higher rates to higher risks accordingly.

Insurance companies have long relied on tradition and data for maintaining the gender-based rating system, with historical numbers showing males are at a higher risk of an accident, and when they are involved in an accident, a higher risk of serious injury or death. In spite of this data, the E.U. has recently banned gender based insurance pricing, as it contravenes their human rights code that prevents gender discrimination.

As insurance companies in Ontario now have to make changes to a binary gender system to include a third option, and as the difference in risk between male and female drivers is shrinking, it’s possible that insurance companies will simply remove gender as a rating variable with drivers, and rate them solely on their driving record.

Do you think this will be the end of gender-based pricing, or do you think that the insurance companies will continue to use your gender in setting auto insurance premiums for years come?

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    Wow, that would be sweet, I’m tired of paying way more than my gf even though we both have clean driving records. I don’t get how in today’s age of equality, insurance companies are allowed this legalized discrimination. Total B.S.

    Well, insurance has always been priced on the historical statistics of those that came before you. As a 34 year old male, I would like to apologize for the three accidents I had that certainly did not help the statistics.

    Women pay slightly less insurance premiums due to historical statistics, showing young gents are in more at fault accidents.

    It is perfectly OK for women to make less? Pay more for shoes/clothes/haircuts, not to mention all the extra girlie stuff that has to be bought that is so expensive.

    I want to be gender X when it comes to those things as well!

    I am confused on why those girlie things “have” to be bought… Are you saying men and women are different? Why don’t men have to buy those same things? Do they not need them? Right, they are in fact different, and as such everything is different and should be. Women also don’t make less when comparing apples to apples, same job, same pay. Fields of work have a massive impact, only argument that can be made is why men dominate certain workplaces, and that is a fair argument.

    Men should pay more for insurance than women, it is a fact. Women are more likely to be involved in minor scrapes, but total losses resulting in bodily injury(the most expensive claims) are more often caused by men. Since 1 of those claims will offset thousands of tiny claims, and since plenty of men still have the small claims, it just makes sense. People may not like it, but insurance isn’t nearly as profitable as many think it is, and actuaries go over mountains of data each year to try to keep things fair for all parties.

    Everyone wants to use it when they need it, no one wants to pay for it.

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