How Marital Status Affects Your Car Insurance Bill

Are you single, separated, divorced or widowed? Are you in a domestic partnership?

If the answer to any of these questions is “yes,” there’s a good chance you’re paying a premium for it in the cost of your car insurance.

New research released this week by the nonprofit Consumer Federation of America (CFA) shows that most major car insurance carriers vary their rates based on a driver’s marital status, with drivers who are not married almost always charged a higher premium.

CFA conducted this research by obtaining quotes from auto insurer websites for the minimum liability insurance required by individual states. The nonprofit obtained quotes for 10 cities, keeping all other driver characteristics the same for each quote except for marital status.

Farmers, Progressive, Nationwide and Liberty almost always charged single, separated and divorced drivers a higher premium than married drivers. Geico always charged nonmarried drivers more.

State Farm was the only major insurer that consistently charged married and nonmarried drivers the same rates.

Geico and Progressive also often charged domestic partners higher premiums than married drivers.

CFA questions “the fairness and relation to risk” of these practices, noting that the insurance industry often cites a 2004 study as evidence that single people have higher driving injury rates than married people.

But CFA questions the validity of that study as a benchmark for assigning rates:

This study, undertaken by several academics, was based on data collected in New Zealand around 1990 involving only 138 injuries, a substantial minority of which involved driving motorcycles. And the difference in injury rates was only about one percentage point.

The practice of charging married and nonmarried drivers different rates also tends to penalize lower-income drivers, CFA argues in a press release, because nonmarried people tend to have lower incomes than married people:

This new research on marital status further supports CFA’s hypothesis that major insurers are not that interested in providing minimum liability coverage, most often purchased by lower-income drivers, because dollar profits are so much higher on policies sold drivers who also purchase collision and comprehensive coverage, often on several cars, as well as homeowner insurance.

Do you think car insurance companies unfairly discriminate against certain types of drivers? Share your thoughts in a comment below or on our Facebook page.