Car Insurance Rating Factors by State

What information can car insurance companies use to price car insurance rates? And how does that vary by state?

Introduction

Can your credit history or marital status affect what you pay for car insurance? What about your gender or your job? For most drivers in the U.S., the answer is yes. But it depends on where you live.

Each state sets its own rules for what information insurance companies can or can’t use when pricing auto insurance. Things like your driving record, what car you drive, and other data about you as an individual help them determine how risky you are to insure. The higher the risk of you filing a claim (and costing the insurance company money), the more you’ll have to pay for insurance.

It’s the personal, non-driving factors that draw the most scrutiny from consumer advocates and insurance regulators. Most states allow insurers to consider these personal factors when setting rates because insurers can show statistics linking each factor to greater risk of claims. However, some states prohibit certain factors they consider to be unfair to use for pricing car insurance. 

In fact, government investigations in two different states recently sparked changes to allowable rating factors. In January 2019, California’s insurance commissioner banned gender in auto insurance rating, and New York banned occupation and education in late 2017. Michigan lawmakers voted to ban six non-driving factors — including gender, education, and credit score — in May 2019.

  • Rating Factor

    Rating factor:

    A single category of information an insurer uses to assess a consumer’s risk and determine pricing (ie. type of vehicle or driving record)

  • Underwriting

    Underwriting:

    The process of insurance companies evaluating a set of rating factors in order to determine risk and appropriate pricing

  • Actuaria Justification

    Actuarial justification:

    The mathematical proof provided by insurance companies that shows how rating factors are linked to increased risk of consumers filing a claim

  • Unfairly Discriminatory

    Unfairly discriminatory:

    Rates are considered unfairly discriminatory when they’re not accurately tied to risk

So where does your state stand when it comes to non-driving rating factors?

 

 


Non-Driving Rating Factors by State

 GenderAgeDriving ExperienceCredit HistoryEducationOccupationEmployment StatusMarital StatusResidential statusAddress/Zip Code

Insurance History

Alabama 
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan*********
Minnesota*
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina*
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island*
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
Washington, DC
West Virginia
Wisconsin
Wyoming

 

Editor’s Note:A factor is considered “permitted” when there are no laws or regulatory policies in the state that ban or effectively ban insurers from using the factor. State regulators generally require actuarial proof of future losses for all rating factors and prohibit rates that are excessive, inadequate, or unfairly discriminatory.

 


About Non-Driving Rating Factors

The following are some of the most common non-driving factors used by insurers to price auto insurance. Whether and how these factors apply to pricing varies by company. 

  • Gender: Is the driver male or female? Men and women pay different rates in most states. Several states allow drivers to identify as gender X or non-binary.
  • Age: How old is the driver? Young drivers, especially teens drivers, are considered higher risk than adult drivers.
  • Driving Experience: How long has the driver been licensed? New drivers are considered higher risk than experienced drivers.
  • Credit History: Has the driver been financially responsible? Drivers with low credit ratings are considered higher risk than those with good credit.
  • Education: Has the driver completed high school or college? Drivers with higher levels of academic achievement are considered lower risk.
  • Occupation: What does the driver do for work? Drivers with certain professions (teachers, engineers, doctors, etc.) are considered lower risk than others.
  • Employment Status: Does the driver have a job? Drivers who work full time are considered lower risk than those who are unemployed.
  • Marital Status: Is the driver married? Married drivers are considered lower risk than those who are single or divorced.
  • Residential Status: Does the driver rent or own their home? Drivers who are homeowners are considered lower risk than those who rent.
  • Insurance History: Has the driver maintained continuous car insurance coverage? Drivers who stay covered are considered lower risk than those who allow coverage to lapse — even for a day.

 


Why are some states different?

Three states — California, Hawaii, and Massachusetts — are noticeably more restrictive than other states. That's because lawmakers in those states decided it was unfair for insurers to charge some drivers more due to certain personal characteristics or possible economic disadvantages. (Editor's Note: Michigan will join these states in July 2020 when a new ban on six non-driving factors goes into effect.)

Those in favor of more restrictive regulation argue that drivers' car insurance costs should primarily reflect their driving. They say it's unfair for insurers to charge higher rates to people who don't have a college degree or who can't afford to own a home.

Other states take a different approach to insurance regulation, giving insurers more leeway to identify and use the factors they find useful in predicting losses. The factors each company considers and how they’re weighted varies, but insurers generally argue that the more flexibility they have to set rates, the more accurate prices are for consumers. They say limiting rating factors can result in lower-risk drivers subsidizing higher-risk drivers. 

Do these different regulatory styles affect rates? Yes, but the impact hits consumers differently depending on their situation. For example, drivers who have a perfect driving record but poor credit may benefit from being in a state like California, where bad credit doesn't impact rates. Drivers with good credit, however, may benefit by being in a state where their good money habits net them a discount on insurance. 

 

California, Hawaii, and Massachusetts are noticeably more restrictive than other states.

 

 


Details by State

 

Alabama

Allowed (with applicable limitations):gender, age, years of driving experience, credit history, education, occupation, employment status, marital status, residential status, address/zip code, insurance history

Banned (or effectively banned): none

Notes & Clarifications:none

 

Alaska

Allowed (with applicable limitations):gender, age, years of driving experience, credit history, education, occupation, employment status, marital status, residential status, address/zip code, insurance history

Banned (or effectively banned):not-at-fault accidents

Notes & Clarifications: Rating prohibitions include the existence or driving record of a resident or relative properly excluded under AS 28.20.440(l); variables that cannot be reevaluated and/or which are fixed at new business inception.  See Alaska’s Rates Checklist for additional details.


Arizona

Allowed (with applicable limitations): gender, age, years of driving experience, credit history, education, occupation, employment status, marital status, residential status, address/zip code, insurance history

Prohibited (or effectively prohibited): none

Notes & Clarifications: none


Arkansas

Allowed (with applicable limitations): gender, age, years of driving experience, credit history, education, occupation, employment status, marital status, residential status, address/zip code, insurance history

Prohibited (or effectively prohibited): none

Notes & Clarifications: none


California

Allowed (with applicable limitations): driving experience, marital status, address/zip code, insurance history

Prohibited (or effectively prohibited): gender, age, credit history, education, occupation, employment status, residential status

Notes & Clarifications: California's insurance commissioner banned gender as of January 2019. Occupation and education are permitted for use in group plans (i.e. for alumni associations and other membership programs).


Colorado

Allowed (with applicable limitations): gender, age, years of driving experience, credit history, education, occupation, employment status, marital status, residential status, address/zip code, insurance history

Prohibited (or effectively prohibited): none

Notes & Clarifications: The permissibility of the above factors depends on detailed review by the state's department of insurance. The company must provide actuarial justification, and factors cannot be applied in a manner that results in a rate that is excessive or inadequate. Use of credit history must comply with the provisions set forth in Colorado Revised Statute 10-4-116. Rates may not be based solely on insurance history, gender, marital status, or age.


Connecticut

Allowed (with applicable limitations): gender, age, years of driving experience, credit history, education, occupation, employment status, marital status, residential status, address/zip code, insurance history

Prohibited (or effectively prohibited): none

Notes & Clarifications: none


Delaware

Allowed (with applicable limitations): gender, age, years of driving experience, credit history, education, occupation, employment status, marital status, residential status, address/zip code, insurance history

Prohibited (or effectively prohibited): none

Notes & Clarifications: none

 

Florida

Allowed (with applicable limitations): gender, age, years of driving experience, credit history, education, occupation, employment status, marital status, residential status, address/zip code, insurance history

Prohibited (or effectively prohibited): none

Notes & Clarifications: none

 

Georgia

Allowed (with applicable limitations): gender, age, years of driving experience, credit history, marital status, residential status, address/zip code, insurance history

Prohibited (or effectively prohibited): occupation, education, and employment status

Notes & Clarifications: none

 

Hawaii

Allowed (with applicable limitations): address/zip code, insurance history

Prohibited (or effectively prohibited): gender, age, years of driving experience, credit history, education, occupation, employment status, marital status, residential status

Notes & Clarifications: none

 

Idaho

Allowed (with applicable limitations): gender, age, years of driving experience, credit history, education, occupation, employment status, marital status, residential status, address/zip code, insurance history

Prohibited (or effectively prohibited): none

Notes & Clarifications: none

 

Illinois

Allowed (with applicable limitations): gender, age, years of driving experience, credit history, education, occupation, employment status, marital status, residential status, address/zip code, insurance history

Prohibited (or effectively prohibited): none

Notes & Clarifications: none


Indiana

Allowed (with applicable limitations): gender, age, years of driving experience, credit history, education, occupation, employment status, marital status, residential status, address/zip code, insurance history

Prohibited (or effectively prohibited): none

Notes & Clarifications: none

 

Iowa

Allowed (with applicable limitations): gender, age, years of driving experience, credit history, education, occupation, employment status, marital status, residential status, address/zip code, insurance history

Prohibited (or effectively prohibited): none

Notes & Clarifications: none

 

Kansas

Allowed (with applicable limitations): gender, age, years of driving experience, credit history, education, occupation, employment status, marital status, residential status, address/zip code, insurance history

Prohibited (or effectively prohibited): none

Notes & Clarifications: none

 

Kentucky

Allowed (with applicable limitations): gender, age, years of driving experience, credit history, education, occupation, employment status, marital status, residential status, address/zip code, insurance history

Prohibited (or effectively prohibited): none

Notes & Clarifications: none

 

Louisiana

Allowed (with applicable limitations): gender, age, years of driving experience, credit history, education, occupation, employment status, marital status, residential status, address/zip code, insurance history

Prohibited (or effectively prohibited): none

Notes & Clarifications: none

 

Maine

Allowed (with applicable limitations): gender, age, years of driving experience, credit history, education, occupation, employment status, marital status, residential status, address/zip code, insurance history

Prohibited (or effectively prohibited): none

Notes & Clarifications: Insurers must provide supporting data and methodology showing rates are actuarially justified and not unfairly discriminatory. Insurers may not refuse a policy solely because a driver has reached age 65. Age and length of driving experience must comply with limitations prohibiting policy cancelations, reductions, refusals, or premium increases for drivers of advancing age.

 

Maryland

Allowed (with applicable limitations): gender, age, years of driving experience, credit history, education, occupation, employment status, marital status, residential status, address/zip code, insurance history

Prohibited (or effectively prohibited): none

Notes & Clarifications: Specific state restricts apply for credit history, marital status, and age. 

 

Massachusetts

Allowed (with applicable limitations): years of driving experience, address/zip code, insurance history

Prohibited (or effectively prohibited): gender, age, credit history, education, occupation, employment status, marital status, residential status

Notes & Clarifications: none

 

Michigan

Allowed (with applicable limitations): gender (group-rated policies), age, years of driving experience, credit history, education, occupation, employment status, marital status (group-rated policies), residential status, address/zip code, insurance history

Prohibited (or effectively prohibited): gender (non-group policies), marital status (non-group policies)

Notes & Clarifications: Gender and marital status are permitted only in rate-making for group plans (i.e. for alumni associations and other membership programs). UPDATE: Michigan lawmakers approved a major insurance reform bill in May 2019 that will ban insurers in the state from using gender, marital status, address/zipcode, residential status, education, credit score, and occupation in rate setting. The ban will be enforced starting in July 2020. Insurers will be permitted to use "territory" as approved by the state regulators instead of zip code. 


Minnesota

Allowed (with applicable limitations): gender, age, years of driving experience, credit history, education, occupation, marital status, address/zip code, insurance history*

Prohibited (or effectively prohibited): residential status, employment status

Notes & Clarifications: Insurance history may only be used if coverage was required by law.  

 

Mississippi

Allowed (with applicable limitations): gender, age, years of driving experience, credit history, education, occupation, employment status, marital status, residential status, address/zip code, insurance history

Prohibited (or effectively prohibited): none

Notes & Clarifications: Rating by address/zip code is allowed; however, rating practices can’t be unfairly discriminatory and must fully comply with Mississippi's Competitive Rating Law criteria.


Missouri

Allowed (with applicable limitations): gender, age, years of driving experience, credit history, education, occupation, employment status, marital status, residential status, address/zip code, insurance history

Prohibited (or effectively prohibited): none

Notes & Clarifications: Insurers must provide support to demonstrate that any variables, on their own or in concert with other variables, do not lead to rates that are excessive, inadequate or unfairly discriminatory.


Montana

Allowed (with applicable limitations): age, years of driving experience, credit history, education, occupation, employment status, marital status, residential status, address/zip code, insurance history

Prohibited (or effectively prohibited): gender

Notes & Clarifications: none


Nebraska

Allowed (with applicable limitations): gender, age, years of driving experience, credit history, education, occupation, employment status, marital status, residential status, address/zip code, insurance history

Prohibited (or effectively prohibited): none

Notes & Clarifications: none


Nevada

Allowed (with applicable limitations): gender, age, years of driving experience, credit history, education, occupation, employment status, marital status, residential status, address/zip code, insurance history

Prohibited (or effectively prohibited): none

Notes & Clarifications: none

 

New Hampshire

Allowed (with applicable limitations): gender, age, years of driving experience, credit history, education, occupation, employment status, marital status, residential status, address/zip code, insurance history

Prohibited (or effectively prohibited): none

Notes & Clarifications: none

 

New Jersey

Allowed (with applicable limitations): gender, age, years of driving experience, credit history, education, occupation, employment status, marital status, residential status, address/zip code, insurance history

Prohibited (or effectively prohibited): none

Notes & Clarifications: none

 

New Mexico

Allowed (with applicable limitations): gender, age, years of driving experience, credit history, education, occupation, employment status, marital status, residential status, address/zip code, insurance history

Prohibited (or effectively prohibited): none

Notes & Clarifications: none

 

New York

Allowed (with applicable limitations): gender, age, years of driving experience, credit history, marital status, residential status, address/zip code, insurance history

Prohibited (or effectively prohibited): occupation, education, employment status

Notes & Clarifications: none

 

North Carolina

Allowed (with applicable limitations): years of driving experience, credit history, occupation, employment status, marital status, residential status, address/zip code, insurance history

Prohibited (or effectively prohibited): gender, age*, level of education*

Notes & Clarifications: Age is permitted only when providing a discount to drivers age 55 and older. Credit may not be the sole criteria for terminating an existing policy, but it can be the sole criteria for discounting rates. Education is prohibited as a general regulatory policy. Specific state limitations apply for occupation and employment status.

 

North Dakota

Allowed (with applicable limitations): gender, age, years of driving experience, credit history, education, occupation, employment status, marital status, residential status, address/zip code, insurance history

Prohibited (or effectively prohibited): none

Notes & Clarifications: none

 

Ohio

Allowed (with applicable limitations): gender, age, years of driving experience, credit history, education, occupation, employment status, marital status, residential status, address/zip code, insurance history

Prohibited (or effectively prohibited): none

Notes & Clarifications: none


Oklahoma

Allowed (with applicable limitations): gender, age, years of driving experience, credit history, education, occupation, employment status, marital status, residential status, address/zip code, insurance history

Prohibited (or effectively prohibited): none

Notes & Clarifications: none


Oregon

Allowed (with applicable limitations): gender, age, years of driving experience, credit history, education, occupation, employment status, marital status, residential status, address/zip code, insurance history

Prohibited (or effectively prohibited): none

Notes & Clarifications: Option for non-binary drivers required for gender.


Pennsylvania

Allowed (with applicable limitations): age, years of driving experience, credit history, education, occupation, employment status, marital status, residential status, address/zip code, insurance history

Prohibited (or effectively prohibited): gender

Notes & Clarifications: Credit may be used for new business and to discount rates at renewal, but not to increase rates at renewal. For marital status, widowed drivers maintain a lower “married” rate after the death of a spouse rather than moving to the higher “single” rate. Rates for other factors may not be excessive, inadequate, or unfairly discriminatory.


Rhode Island

Allowed (with applicable limitations): gender, age*, years of driving experience, credit history, education, occupation, employment status, marital status, residential status, address/zip code, insurance history

Prohibited (or effectively prohibited): none

Notes & Clarifications: Age is permitted up to age 65. Drivers with no credit history must be treated as “neutral.”


South Carolina

Allowed (with applicable limitations): gender, age, years of driving experience, credit history, education, occupation, employment status, marital status, residential status, address/zip code, insurance history

Prohibited (or effectively prohibited): none

Notes & Clarifications: none

 

South Dakota

Allowed (with applicable limitations): gender, age, years of driving experience, credit history, education, occupation, employment status, marital status, residential status, address/zip code, insurance history

Prohibited (or effectively prohibited): none

Notes & Clarifications: none

 

Tennessee

Allowed (with applicable limitations): gender, age, years of driving experience, credit history, education, occupation, employment status, marital status, residential status, address/zip code, insurance history

Prohibited (or effectively prohibited): none

Notes & Clarifications: none

 

Texas

Allowed (with applicable limitations): gender, age, years of driving experience, credit history, education, occupation, employment status, marital status, residential status, address/zip code, insurance history

Prohibited (or effectively prohibited): none

Notes & Clarifications: none

 

Utah

Allowed (with applicable limitations): gender, age, years of driving experience, credit history, education, occupation, employment status, marital status, residential status, address/zip code, insurance history

Prohibited (or effectively prohibited): none

Notes & Clarifications: none


Vermont

Allowed (with applicable limitations): gender, age, years of driving experience, credit history, education, occupation, employment status, marital status, residential status, address/zip code, insurance history

Prohibited (or effectively prohibited): none

Notes & Clarifications: none


Virginia

Allowed (with applicable limitations): gender, age, years of driving experience, credit history, education, occupation, employment status, marital status, residential status, address/zip code, insurance history

Prohibited (or effectively prohibited): none

Notes & Clarifications: Insurers using any criterion for pricing purposes (discounts, surcharges, tier level, etc.) must apply the criteria to all risks, not just to the same class of risks.


Washington

Allowed (with applicable limitations): gender, age, years of driving experience, credit history, education, occupation, employment status, marital status, residential status, address/zip code, insurance history

Prohibited (or effectively prohibited): none

Notes & Clarifications: none

 

Washington D.C.

Allowed (with applicable limitations): gender, age, years of driving experience, credit history, education, occupation, employment status, marital status, residential status, address/zip code, insurance history

Prohibited (or effectively prohibited): none

Notes & Clarifications: none


West Virginia

Allowed (with applicable limitations): gender, age, years of driving experience, credit history, education, occupation, employment status, marital status, residential status, address/zip code, insurance history

Prohibited (or effectively prohibited): none

Notes & Clarifications: none


Wisconsin

Allowed (with applicable limitations): gender, age, years of driving experience, credit history, education, occupation, employment status, marital status, residential status, address/zip code, insurance history

Prohibited (or effectively prohibited): none

Notes & Clarifications: none


Wyoming

Allowed (with applicable limitations): gender, age, years of driving experience, credit history, education, occupation, employment status, marital status, residential status, address/zip code, insurance history

Prohibited (or effectively prohibited): none

Notes & Clarifications: none

 

The Zebra contacted insurance regulators in each state and Washington D.C. to verify the above information. Updates are made as new laws and policies go into effect and are accurate to the best of our ability. (For clarifications, please contact us at research@thezebra.com.)

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