Rising car insurance hits young men hardest
Charging
single male drivers more based on their age, not driving record, is
discriminatory, N.S. student says
By PETER CHENEY and PAUL WALDIE
Monday, June 23, 2003 - Page A3
For Tony Roeding,
living at home while he went to Saint Mary's University looked like the perfect
plan -- at least until he found out that insurance for the used Honda he
planned to commute with would cost $6,000.
"I couldn't believe it," said Mr. Roeding, who recently turned 20. "It was one of the
most ridiculous things I ever heard. The car only cost $10,000, and they wanted
more than half that."
Mr. Roeding, who
lives near Peggy's Cove, N.S., is one of countless young Canadian men who have
found themselves hit with staggering car insurance bills that have forced them
to a
Their woes are part of a national crisis
that has jacked up the cost of insurance to unprecedented levels for many
Canadians. Many drivers in Atlantic Canada, for example, have seen increases of
60 to 70 per cent. In
"The system is a mess," said
Stephen Boyce of the New Brunswick Consumers' Coalition. "I don't think
it's working for anybody."
Although most Canadian drivers have seen
increases, young male drivers have been hit
particularly hard. Industry experts say it's now
common for 18-year-olds to pay $8,000 to insure a used car. One 19-year-old
Although young men have long paid far more
for insurance than other drivers, since they are considered
higher risks, some have begun to challenge the logic that pushes their rates so
high. Mr. Roeding, for example, believes that the
insurance industry's rating system is a form of discrimination.
"It seems like this is the only area of
life where you're allowed to discriminate," he said. "I get judged
because I'm a member of a group, not because of who I actually am. That's what
discrimination is, and it's supposed to be illegal."
Mr. Roeding notes
that a female cousin whose demographics are virtually identical to his own pays
a small fraction of what he does. "What makes her different?" he
asked. "Why are they allowed to charge me so much just because I'm a male?
They aren't allowed to look at other groups in the
same way. What if they decided that members of some racial
groups had more accidents? Would they be allowed to charge every member
of the group more because of that?"
Mr. Roeding
believes the only fair way to judge drivers is by assessing their actual
driving records. By that standard, Mr. Roeding would
appear to be a good risk. He has been driving since he was 16, lives in a
low-traffic area, attended a Young Drivers of Canada course, and has no tickets
or accidents. A more careful examination shows other positive factors,
including the guidance of his father, a retired fighter pilot who recently
served as the base safety officer for Canadian Forces Base Shearwater.
"I'm a careful driver," Mr. Roeding said. "But I get judged just because of the
group I'm in."
Mr. Roeding's case
is typical of young drivers' who live in provinces that are
served by private auto insurance.
The situation is far different in provinces
such as
Brandon Sparks, 17, who lives in Abbotsford,
B.C., for example, pays just $1,740 a year to insure his 1988 Honda Civic, far
less than young men in
"We don't differentiate on age, sex or
martial status," Mr. Geer said. "You have to buy into a discount and
have accident-free years. We don't rate by age, sex or marital status."
The provincially owned corporation has kept
premiums and rate increases below the national average. But
others say not taking age or sex into account raises other issues of
discrimination. Ryan Lee, a business professor at the
Steve Smith, vice-president of Kingsway
Financial Services, an Ontario-based insurer, rejects the notion that the high
rates charged to young men are discriminatory.
"It isn't arbitrary," he said.
"It's based on statistics. You can't argue with it."
Mr. Smith said his company's rating system
is typical of the private insurance industry. It takes into account a number of
factors that include sex, age, location, marital status and driving experience.
An 18-year-old man, Mr. Smith said, typically pays four to five times as much
as a married 45-year-old.
"The statistics are clear," he
said. "Young men have more crashes. And the only
thing you can do is judge them as a group, because as individuals they don't
have enough driving history yet. It's unfortunate, but that's the way it
is."
Mr. Direnfeld said car crashes involving
teenaged drivers cause about 6,000 deaths and 400,000 injuries in
"They're the ones at fault," he
said. "Open any newspaper and you'll see the proof. And the statistics
back it up."
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