August 2019

Renters Pay up to 11% More Than Homeowners for Car Insurance

Almost half of consumers think it's unfair for insurers to consider homeownership status in car insurance pricing.

BASED ON A NATIONAL ANALYSIS OF 61 MILLION CAR INSURANCE RATES

Intro

Insurance providers measure your financial responsibility in many different ways, from checking out your credit rating to making sure you’ve had prior insurance coverage.

And, in 46 states, insurers can consider whether you own or rent your home when pricing your car insurance. 

A rate analysis performed by The Zebra shows that drivers who rent pay more for car insurance than those who own homes — both before and after insurers apply discounts for bundling your home (or renters) and car insurance policies.

Insurance regulators generally allow insurers to consider homeownership in car insurance pricing, because insurers can show that homeowners are less risky to insure (i.e. they’re less likely to file a car insurance claim). However, lawmakers in several states have found it unfair that renters have to pay more for car insurance than homeowners, highlighting different barriers people face on the path to homeownership.

On July 1, 2020, Michigan will become the fifth state to ban homeownership from being considered in car insurance pricing, joining Hawaii, California, Massachusetts, and Minnesota.

 


 

Key Findings

1) Renters pay more than homeowners for the same car insurance coverage in 46 states and Washington D.C.

2) Nearly half of drivers don’t think it’s fair for auto insurers to price policies based on homeownership. 

3) Whether you rent or own your home, data shows that bundling policies reduces car insurance costs.





 

1) Renters Pay More for Car Insurance in 46 States

Nationally, drivers who own their homes pay about $35 or 2.4% less per year than drivers who rent.

A closer look at the data shows that the impact of homeownership on car insurance rates varies greatly by state. 

New Jersey drivers who rent pay $160 or 10.6% more than drivers who own homes. Meanwhile, renters in Tennessee pay just $10 (0.7%) more for car insurance than homeowners.

Car Insurance Rates For Renters vs. Homeowners

 RenterHomeownerRenter pays % moreRenter pays $ more
New Jersey$1,671$1,51110.6%$160
New York$1,688$1,6025.4%$86
Connecticut$1,550$1,4745.2%$76
Alaska$1,198$1,1514.1%$47
Arizona$1,295$1,2473.8%$48
Michigan*$2,693$2,5993.6%$94
Virginia$918$8893.3%$29
Florida$2,059$1,9953.2%$64
Colorado$1,682$1,6313.1%$51
Montana$1,387$1,3473.0%$40
New Mexico$1,352$1,3152.8%$37
Missouri$1,410$1,3722.8%$38
Arkansas$1,496$1,4572.7%$39
Maine$896$8732.6%$23
Texas$1,827$1,7812.6%$46
Louisiana$2,339$2,2812.5%$58
Idaho$1,018$9932.5%$25
Kansas$1,476$1,4412.4%$35
Kentucky$1,898$1,8542.4%$44
Wisconsin$1,070$1,0462.3%$24
Ohio$1,032$1,0092.3%$23
Nevada$1,915$1,8732.2%$42
West Virginia$1,420$1,3892.2%$31
New Hampshire$1,105$1,0812.2%$24
Oklahoma$1,560$1,5272.2%$33
Delaware$1,828$1,7902.1%$38
Vermont$1,075$1,0532.1%$22
Washington$1,205$1,1821.9%$23
Wyoming$1,375$1,3501.9%$25
Pennsylvania$1,390$1,3651.8%$25
Mississippi$1,537$1,5101.8%$27
Maryland$1,327$1,3041.8%$23
Illinois$1,222$1,2021.7%$20
Rhode Island$2,110$2,0761.6%$34
South Carolina$1,369$1,3481.6%$21
Oregon$1,393$1,3731.5%$20
Alabama$1,387$1,3701.2%$17
Indiana$1,150$1,1361.2%$14
Utah$1,209$1,1951.2%$14
North Dakota$1,325$1,3111.1%$14
Georgia$1,547$1,5321.0%$15
South Dakota$1,342$1,3291.0%$13
Nebraska$1,284$1,2720.9%$12
District of Columbia$1,496$1,4830.9%$13
North Carolina$947$9390.9%$8
Iowa$988$9800.8%$8
Tennessee$1,427$1,4170.7%$10


*California, Hawaii, Massachusetts, and Minnesota don’t allow car insurance pricing by homeownership status. Michigan has banned it effective July 2020. 

The metro areas in the U.S. with the biggest car insurance rate differences between homeowners and renters are primarily on the East Coast. Jersey City, N.J., tops the list, with renters paying 11.4% ($218) more than homeowners for the same coverage.

Map

Data





 

2) Nearly Half of Drivers Think It’s Unfair for Insurers to Consider Homeownership in Car Insurance Pricing

Though homeownership has a significant impact on car insurance in some places, most drivers are unaware that it plays a role at all. 

In fact, only 21.2% of drivers surveyed¹ by The Zebra knew that owning or renting their home could affect what they pay for car insurance. 

When drivers were asked (in a separate survey²) whether they thought it was fair to consider homeownership in car insurance pricing, nearly half (46%) of drivers found it to be unfair. 

Stats

 

 

 


 

3) Whether You Rent or Own, Comparing Rates and Bundling Count

While insurers in most states consider homeownership in car insurance pricing, not all insurance companies take it into account. Renters who are worried their residential status could be costing them can compare rates to find an insurance provider that penalizes them less — or not at all.

The other good news: Our data shows that both renters and homeowners can benefit by combining their car insurance policy with a home or renters insurance policy. 

Insurance companies frequently advertise “bundling” — or combining renters or home insurance with car insurance — as a way to save money. According to our data, renters who bundle policies save 5% (about $77) on average, nationally, while homeowners who bundle save 10% (about $139). Condo owners split the difference and typically save 8% (about $119). 

The savings could be more or less, depending where you live. Drivers should compare insurance coverage details and prices to see if it’s a good deal for you. 

Bundling Savings For Renters vs. Homeowners

 

% Saving for Homeowners 

$ Saving for Homeowners

% Saving for Renters

% Saving for Renters

Alabama10.9%$1505.0%$69
Alaska8.2%$945.3%$63
Arizona12.5%$1566.1%$79
Arkansas11.5%$1676.8%$101
California11.0%$2004.3%$78
Colorado9.8%$1605.9%$100
Connecticut6.7%$995.9%$91
Delaware10.6%$1895.4%$98
District of Columbia7.8%$1154.4%$66
Florida4.3%$852.1%$44
Georgia8.6%$1314.7%$73
Hawaii6.2%$623.3%$36
Idaho9.9%$986.2%$63
Illinois14.1%$1695.2%$64
Indiana12.9%$1478.5%$98
Iowa10.2%$1008.9%$88
Kansas10.8%$1557.7%$113
Kentucky9.4%$1755.4%$102
Louisiana8.5%$1955.9%$138
Maine11.3%$993.9%$35
Maryland8.4%$1093.9%$52
Massachusetts13.5%$1728.4%$107
Michigan11.5%$2994.1%$111
Minnesota12.3%$15612.2%$157
Mississippi9.4%$1427.5%$115
Missouri10.9%$1505.1%$72
Montana10.8%$1464.8%$67
Nebraska13.2%$1685.8%$75
Nevada10.7%$2014.5%$86
New Hampshire9.5%$1035.2%$57
New Jersey7.9%$1204.2%$70
New Mexico11.6%$1534.7%$64
New York5.9%$953.2%$54
North Carolina5.9%$554.2%$40
North Dakota12.8%$1687.7%$102
Ohio9.4%$954.9%$51
Oklahoma10.1%$1545.9%$92
Oregon11.7%$1606.0%$83
Pennsylvania11.8%$1616.5%$91
Rhode Island8.6%$1785.5%$115
South Carolina8.6%$1163.6%$49
South Dakota15.0%$1997.4%$99
Tennessee10.0%$1416.4%$91
Texas6.6%$1173.7%$68
Utah12.1%$1455.4%$65
Vermont10.8%$1146.7%$72
Virginia6.4%$574.1%$38
Washington9.3%$1104.7%$57
West Virginia6.0%$844.1%$58
Wisconsin13.2%$1386.2%$66
Wyoming9.9%$1344.6%$63

Methodology

The Zebra’s 2019 State of Auto Insurance Report analyzed 61 million unique rates to explore pricing trends across all United States zip codes including Washington, DC. Analysis used a consistent base profile for the insured driver: a 30-year-old single male driving a 2014 Honda Accord EX with a good driving history and coverage limits of $50,000 bodily injury liability per person/$100,000 bodily injury liability per accident/$50,000 property damage liability per accident with a $500 deductible for comprehensive and collision. The driver’s homeownership status and multi-policy (bundling) status were changed to obtain rate differences. 

¹Based on an online survey of 1,165 U.S. auto insurance consumers ages 18 and older. The survey was conducted by independent research firm Survata from October 4-5, 2017. 

²Based on an online survey of 1,013 U.S. auto insurance consumers ages 18 and older. The survey was conducted by independent research firm SurveyGizmo from September 14-19, 2018. 

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