How do car insurance companies account for gender-fluid and non-binary drivers?
While some US states have started recognizing non-binary gender identity on official driver's licenses and IDs, this acknowledgment is less common in the insurance industry. Car insurance companies have been slow to adjust for several reasons:
Gender is one of the primary factors used by car insurance companies to assign premiums. It's worth noting that gender only impacts insurance costs substantially for teen drivers, as young male drivers pay a premium compared to their female counterparts. Once you’ve left your teen driving years behind, the difference between car insurance rates for women and men amounts to a rounding error.
|Gender||Average Annual Premium||% Difference|
Gender is a major pricing influencer for young drivers. On average, young female drivers pay 15% less for car insurance than do young male drivers. Because historical data shows that young male drivers get into more accidents and file more claims, insurers charge higher premiums to account for the additional risk.
|Age||Average Annual Premium||% Difference — Male vs. Female|
So, while a gender-neutral car insurance policy might not change much for an older driver, the stakes are higher when a young driver is involved.
Bear in mind, you can find gender-neutral car insurance in some states — but it’s by way of a technicality. Hawaii, Massachusetts, and California are the only states that do not use gender as a rating factor. So, while your gender is still recorded in your car insurance policy, it does not contribute to pricing.
Insurance companies — especially auto insurers — have specific ways of doing business from which they’re slow to deviate. Insurance companies determine what you will pay going forward — your premium — based on the previous year's historical data. They rely on the past to dictate how they do business in the future.
For an insurance company, it is hard to predict what a “gender-neutral” individual will mean in terms of risk. It's hard for an insurer to provide a non-binary gender option to their client if a gender-neutral driving risk baseline hasn't yet been established.
While gender neutral car insurance doesn’t currently exist, it might in the future. Because car insurance companies rely on previous years' data to set pricing, it is hard for an insurer to price a gender-neutral client. But with ongoing legislation and support, car insurance for non-binary drivers could soon be a reality.
If you're interested in gender-neutral car insurance, speak directly with an insurance agent. Most online platforms will require you select male or female to obtain a quote, but an agent might offer more flexibility.
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