Will Transgender Drivers Pay More For Car Insurance?

August 01, 2018

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A man recently made headlines for officially changing his gender — not to reflect his identity, but just to save money on car insurance. He requested a new birth certificate and driver’s license that identified him as female, allowing him to save $91 (Canadian currency) per month on insurance. “I felt like I beat the system. I felt like I won,” he told the CBC.

Now, people increasingly have the option to change their official gender or select the third option, nonbinary (or unspecified). What might that mean for car insurance rates?

A New Trend: Gender Alternatives on Drivers’ Licenses

Society has recently come to understand that gender is complex, and not everyone fits into the M or F box. You can identify as non-binary — not choosing either gender. You can be transgender, which means your gender identity doesn’t match your body/the gender assigned at birth. Or, you can be something else entirely.

As of 2018, three states — Oregon, California and Maine — and Washington, D.C. allow residents to choose something other than M or F on their drivers’ licenses. In Oregon, you may choose “not specified” as your gender, which is marked as an X on your license. In Maine, you can select “nonbinary.” California’s S.B. 179, the Gender Recognition Act, allows people to get a new birth certificate or driver’s license (beginning in 2019) that states one’s gender as female, male, or nonbinary.

Why is this important? For someone who is transgender or non-binary, this official designation isn’t just a feel-good affirmation. When someone’s ID doesn’t match their appearance or gender identity, that can put them at risk for being harassed or attacked.

Now, car insurance companies and consumers are trying to figure out what these gender options mean for car insurance rates.

How Gender Affects Car Insurance Rates

It wouldn’t be fair to say men are worse drivers than women, but years of data show a few indisputable facts: men are more likely to speed, less likely to wear seatbelts, and more likely to drive under the influence of alcohol. When insurance companies look at these numbers, they conclude that male drivers are higher-risk. That means car insurance is typically more expensive for men, especially when they’re under 25. Over an entire lifetime, the average man pays around $15,000 more for car insurance compared to a woman, one study found.

However, these trends don’t mean that every female driver pays less for insurance than a comparable male driver. When the Consumer Federation of America compared quotes from major insurers, it found that “40- and 60-year old women with perfect driving records were charged more than men for basic coverage nearly twice as often as men were charged the higher rate.”

Non-Binary and Transgender Car Insurance Rates

Will auto insurance companies offer different rates for transgender and nonbinary drivers? That’s what they’re trying to figure out.

In Oregon, the state’s Division of Financial Regulation told auto insurers that if they factor in sex or gender when setting rates, they must accommodate consumers who designate their sex as neither male nor female on their driver’s licenses. If they don’t, they could get in trouble for unfair discrimination. This means that starting Jan. 1, 2019, insurers must file rates for drivers whose gender is “not specified.” Will those rates be higher or lower than existing rates for males or females? That remains to be seen.

California insurers are going through a similar process. If a company wants to change its rates specifically for transgender/nonbinary drivers, they’ll have to submit those changes to the state’s regulatory process, says Chris Shultz, chief deputy director at the California Department of Consumer Affairs. The state will ensure that one’s gender identity doesn’t result in “arbitrarily higher rates,” Shultz says.

So, should you be like that Canadian guy and change your official gender purely to save money on car insurance? The simple answer: No. In California, according to the new law, if you want to change your gender on your birth certificate, you must sign an affidavit attesting that you’re conforming your legal gender to your gender identity, not doing it “for any fraudulent purpose.” Getting a better deal on insurance is not a good enough reason! Also, if your car insurance company discovers that you misrepresented your gender, the company could cancel your coverage, making it hard for you to get insured.

Luckily, we have a better way for you to save money on your insurance: Just compare quotes! When you look at your personalized quotes side by side, you can easily find the cheapest rates and the best coverage for your situation.

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