Why Does Marital Status Affect Car Insurance Rates?

Why Does Marital Status Affect Car Insurance Rates?

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Car insurance for married couples

Auto insurers measure how much of a risk you pose against a number of factors. These include demographics, location, profession, driving record, type of vehicle, credit score, and claims history.

But did you know they also take marital status into account and offer lower rates to married people? 

Why insurers charge married people less for car insurance

While this doesn’t seem fair on the surface, the insurance industry has its reasons for using marital status to determine car insurance rates.

1. Single people are often younger 

Research shows that car crashes are higher among young people. This is largely due to their lack of driving experience and engaging in distracted driving behavior like texting and driving. 

In the U.S., teens are most at risk of car crashes. In the UK, it’s drivers aged 21-29 who have the most car crashes. Whether teen or twenty-something, younger drivers are more reckless.

As single people are often younger, insurance companies view them as riskier drivers.

2. Married people are seen as more responsible

Once you get married, mortgages, bills, and steady jobs tend to follow.

Insurance companies see married people as more mature, responsible, and financially stable. Even males 25 and younger (who typically pay the highest insurance rates), receive a discount on car insurance when they wed, provided they have no major blemishes on their driving record.

3. Married people with kids tend to be safer drivers

What else follows marriage? Kids.

Once a baby arrives, parents tend to become safer drivers. According to a survey by IDriveSafely.com, despite the fact fretful babies and toddlers pose a distraction while driving, 82% of parents still believe that they became safer drivers with a baby in the car.

Parents of teenagers also become more aware of their driving behavior as they try to set a good example when their teen learns to drive. 

4. Married couples are more likely to take bundled packages 

Many insurance companies offer home and car bundles or multiple car policies at discounted rates.

As a family with multiple drivers or multiple policies, you’re giving the insurance company more business. That, for one, makes them happy. In addition, being a homeowner or adding life insurance is another indicator of financial responsibility, so insurers are willing to reward you with lower rates. 

5. Married people may drive less

Married people may use one car to drive to work, social events, or the grocery store, which means one partner is driving less. Less miles can lower your premiums, even if you’re not married, so chat to your insurer if you are driving less. 

Living the single life can also mean being out at night and drinking more. This not only adds more miles to the clock but also increases the risk for drunk-driving accidents.

Married people with families, on the other hand, are more likely to stay home, safe and sound. 

Single vs married: How much do you pay?

According to The Zebra, married people pay, on average, $75 less per month than single people. But this isn’t only directed at people who never married. Divorced and widowed drivers are also penalized, paying $86 and $50 more, respectively. 

So when did this practice start? Many insurance companies refer to a 2004 study by the National Institute of Health conducted in New Zealand using data collected between 1988 and 1998. It showed that out of 10,525 participants, 139 driver injuries occurred. The study concluded that never married people had a higher risk of driver injury than married people. 

The problem with this study is that the sampling was small, the accidents few, it tracked driving behavior in a different country, and it is now hopelessly outdated.

Should marital status influence car insurance rates? 

It makes sense to include factors like age, location and type of car you drive. Younger inexperienced drivers are more likely to be involved in car accidents. A high crime area increases the risk for car break-ins and theft, and an expensive car will cost more to repair. 

What is being questioned is why factors like gender and marital status are used to influence rates. In some states, like California and North Carolina, insurance companies are no longer allowed to use gender to determine rates. Five states (Hawaii, Massachusetts, Michigan, and Montana) also ban marital status. 

The Consumer Federation of America (CFA) advocates against using non-driving behavior, like marital status, gender, education, occupation, and credit scores, to determine rates. The number of car accidents, traffic violations, and miles driven are more solid indicators of risk. 

Single, separated and divorced persons also tend to have lower incomes and hiking their car insurance premiums adds to their financial strain. The CFA sees it as discriminatory against low- and moderate-income Americans.

Insurance companies say research backs them up, but is it fair to treat all single people or all married people as an equal risk? I guess that’s a question for the actuarial tables to answer.



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