Why do men under the age of 25 pay more for car insurance than women do?

Answer

Good question. It can be pretty infuriating, can't it? Particularly if you're a good driver.

But...statistically speaking, men under 25 cause more accidents. Some carriers even made the cut-off date age 30(!).

So, what if you're under 25, and you've never had an accident in your life, never made a claim, never had a ticket...never even thought about getting behind the wheel after having a couple of beers? Why are you "paying the price" when you don't contribute to accidents?

Because of the "law of large numbers," which is what insurance is based on. Everybody pays into a pool, and those who need the money get it. The system works because not everyone makes claims, and so the relatively small amount you pay in premiums can be applied to the larger payments for accidents.

But since you fall in a higher-risk category, you're expected to pay more, even if you never, ever take advantage of your insurance policy. It's similar to a person who pays a higher premium for his 2004 Cadillac Escalade, compared to a person driving a 1998 Honda Civic. The Cadillac driver, by virtue of owning such an expensive car, has assumed a higher risk, and pays accordingly.

Naturally, you don't get to choose to be under 25 (as opposed to a person who chooses to buy a Cadillac), but the principles are the same.

• What happens if a non-licensed driver crashes an insured car but the owner of the insured car was unaware that they did not hold a valid license will insurance cover this?
• What is the maximum age to be on parents' car insurance policy?
• Alberta days to insure and register?