How does car insurance work for gender X drivers?

Depending on where a person lives, gender can play a significant impact in the rate they pay for car insurance. 

Until recently, Canadian identification documents had two options when it came to identifying gender: male or female. 

In 2017, Ontario added a third option to their driver’s license application: gender X. One by one, the other provinces followed suit and by 2019, gender X was an option that drivers could select on all driver’s license applications across Canada. 

Since that time, many insurance companies have also begun providing a gender X option on policy applications.

Does gender affect insurance rates? 

In short, yes. Gender does affect insurance rates in most cases. 

Insurance premiums are calculated based on the level of financial risk a person poses to their insurance company, or, to put it simply, how likely they are to submit an insurance claim. The more likely a person is to submit a claim, the higher their premiums will be.

There are many factors used to calculate a person’s insurance premiums including their personal driving history, years of experience, location of their home and workplace, age, and gender.

It’s been proven that men pose a greater risk behind the wheel than women. Statistics show that men are more likely to engage in risky behaviour like not wearing seatbelts, speeding and driving while intoxicated, making them more likely to be involved in a motor vehicle crash. In fact, Statistics Canada reports that males are almost twice as likely to die in a passenger vehicle collision than females. 

There are a few exceptions – in British Columbia, Saskatchewan, and Manitoba, auto insurance runs on a public system in which rates don’t account for age or gender. And although drivers in New Brunswick and Newfoundland purchase coverage through private carriers, insurers are banned from using gender as a rating factor. 

Which gender pays more for car insurance?

Each of the factors mentioned above contributes to an increased risk of insurance claims, causing insurance companies to charge men higher premiums than women. 

According to Canadian Underwriter, in 2020, the average Canadian woman paid 5-15% less for their car insurance premiums than the average Canadian man. 

• Average male insurance premium in 2020: $163
• Average female insurance premium in 2020: $141

How does car insurance work for genderless drivers?

The introduction of gender X as an option on Canadian identification documents has caused insurance providers to evaluate how gender should be factored into the calculation of insurance premiums. 

P&C insurance providers use decades of accident data to evaluate the level of risk that men and women pose behind the wheel, but since gender X is a relatively new classification, this data is not available for gender X drivers.  

While there is no Canada-wide guideline as to how to calculate insurance premiums for gender X drivers, some provinces have set recommendations – this includes the Ontario auto insurance, Alberta auto insurance, and Nova Scotia auto insurance systems.

In most cases, it is recommended that insurance companies offer gender X drivers rates that are in line with female drivers, while others recommend charging the average between male and female premiums. 

Should gender still be a factor in calculating car insurance rates?

This is a common question with no easy answer. 

There is uncertainty around which characteristics a gender x driver will exemplify – those that align with the gender assigned at birth, or those that align with the gender the person currently identifies with. 

Advances in technology have given insurers the option to assess a driver’s level of risk based on actual habits and behaviours rather than make assumptions based on their gender. 

Insurers can now equip drivers with telematics devices (also known as usage-based insurance) to review their individual behaviour on the road and track how well they obey traffic laws like speeding, stopping, wearing their seatbelts and more. 

Providers often incentivize drivers to download these devices onto their phones or mount them to their dashboards with the promise of discounted rates. 

For those reasons, it’s reasonable to expect that gender will become less and less of a consideration when calculating insurance rates over time.

What can non-binary and transgender drivers do when shopping for car insurance?

With no consensus on how these rates should be calculated, every provider is doing things differently, making it very important for non-binary and transgender drivers to shop around before choosing a car insurance policy. 

If you are a gender X driver, be sure to consult with multiple providers to compare car insurance quotes. Don't be afraid to ask questions about how the rates are calculated and which gender is being used to determine your premiums. 

Carefully assess the differences between the rates and levels of coverage before deciding which is the best policy for you. 

The bottom line

The question of whether gender impacts car insurance is not quite as simple for transgender or non-binary drivers as it is for cisgender drivers, and it’s certainly a difficult question for insurance companies. 

While insurance providers assess whether gender should still be a factor that impacts a customer’s premiums, it is important for transgender and non-binary drivers to do their research and understand the different policies and calculations that companies use to determine their premiums. 

Ratehub.ca acknowledges all gender identities and is currently working to offer a better auto insurance quoting experience for all users.

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