Insurance companies use a range of rating factors to determine how much you’ll pay for a car insurance policy. In many states, insurers have the option to use gender as a rating factor. Inequalities often exist in the rates that male and female drivers pay for auto insurance.
Available data does not clearly define how one’s gender plays a role in gender-based insurance rating for transgender and nonbinary drivers. However, certain critical factors, such as a driver’s claims record, can play a major role in their insurance premium, regardless of gender.
Key Takeaways
- Most states allow insurance companies to use gender as a factor when determining your auto insurance rate.
- Some insurers have discontinued the gender-based rating practice.
- Recent studies have found disparities in how some insurance companies set rates for male and female drivers.
- Currently, it is statistically unclear how car insurance rates for transgender and nonbinary motorists compare with those of drivers who identify as female or male.
- Other rating factors, such as your driving record, can significantly impact your car insurance premium.
How Gender Affects Car Insurance Rates
Gender is just one way that some insurers determine your car insurance rates. Drivers who are cisgender—people who identify as the sex listed on their birth certificates—often pay rates based on statistical data that correspond with their gender. However, the same rating process may not apply to transgender and nonbinary auto insurance policyholders.
Cisgender Policyholders
It is a widely held belief that American women often pay less than men for auto insurance because, statistically, female drivers have fewer automobile accidents than male motorists. However, recent state-level studies conducted by the Consumer Federation of America (CFA) dispute that belief.
“We found that, contrary to the popular stereotype, women are charged more than men. It wasn’t uniform among states or from insurance company to insurance company,” Michael DeLong, CFA research and advocacy associate, told Investopedia. “We found that women got charged more based on their gender, sometimes substantially more, and it didn’t seem to be connected to any good risk that we could find. For example, in Arkansas we found that men, on average, got charged about $529 for auto insurance, but women got charged $537 for auto insurance.”
However, rates can vary widely among carriers and states. “We found that in some states, some insurance companies charge men and women equally,” DeLong said. “There are some insurers who charge men higher auto insurance premiums than women, and there are some auto insurance companies that charge women higher insurance premiums than men.”
According to the CFA reporting, price variations are quite high in some instances. For example, CFA’s 2022 Delaware gender-based car insurance analysis found that one major insurer charged 35-year-old women 21% higher rates than men of the same age. In Louisiana, on average, the same carrier charged female drivers 17% higher premiums than their male counterparts.
Transgender and Nonbinary Policyholders
Currently, little data exists to conclude how insurers determine rates for transgender and nonbinary policyholders.
“In our Delaware report, we found that some folks transitioned, then their auto insurance rate went up,” DeLong said. “We got quotes from Progressive for nonbinary drivers in Colorado and found that they got charged an intermediate amount. For instance, male drivers, on average, were quoted a rate of $53 per month. For a nonbinary driver, their quote was $55 per month; for a woman, they quoted $57 per month.”
Other Rating Factors
Often, a driver’s gender has little impact on their car insurance premium, but other rating factors can impact how much they’ll pay.
“I have not seen a gender discrepancy,” Fritz Oviedo, an insurance agent with Affluence Insurance Services in Dallas, Texas, told Investopedia. Affluence sells policies for about 30 insurance companies. “Age can be a factor if you’re over 70 or so, but usually your record is a bigger factor, if you have speeding tickets or claims. Location is also a big factor. For example, [with] inner city versus secure gated community, the rates are going to be different.”
Gender on Car Insurance Applications
Some states do not allow gender-based auto insurance rating: California, Hawaii, Massachusetts, Michigan, Montana, North Carolina, and Pennsylvania.
Some insurers no longer include gender as a rating factor. “State Farm is one of the biggest companies that does not use it,” DeLong said. “Shelter Insurance also does not seem to use gender as a rating factor; neither does Auto-Owners.”
Some insurers now offer additional gender options on car insurance applications, according to Oviedo. Investopedia evaluated the online quote process of several major car insurance companies, using a Texas ZIP code. We found that some providers only give you the option to select male or female gender markers, while one has eliminated the gender question altogether.
How to Get Car Insurance as a Transgender or Nonbinary Person
Transgender and nonbinary motorists can buy auto insurance from the same insurers that offer policies for cisgender drivers. While the buying process is essentially the same for everyone, transgender and nonbinary people may find it beneficial to seek out insurance agents and companies that understand their unique needs and challenges.
Shop Around for Quotes
Obtain quotes from several insurers. Most major carriers offer free online quotes. Print each quote to compare it with those of other insurance companies. When evaluating car insurance quotes, compare rates, coverages, optional coverages, and discounts.
Before shopping for quotes, find out which coverage your state requires by law. Along with required coverages, you may also need to purchase additional protections for financed or leased vehicles.
Talk to an Agent
When speaking with insurance agents, ask them if their company uses gender as a rating factor. The agent will ask you questions about your driving record and claims history and will need information about the vehicle you want to insure. Always answer all questions truthfully and completely.
When searching for an insurance agent, state and local LGBTQ chambers of commerce are a great place to start. LGBTQ chambers of commerce often offer a members directory on their websites, where you can find LGBTQ-friendly companies.
Find an Insurer with LGBTQ-Inclusive Policies
Also, look for insurance providers that rank highly as an LGBTQ employer. Each year, the Human Rights Campaign publishes its Corporate Equality Index, which lists hundreds of companies with the best LGBTQ-inclusive workplace policies, benefits, and practices.
States That Provide a Nonbinary Option for a Driver’s License
According to the Movement Advancement Project, 22 states and the District of Columbia currently allow drivers to choose male, female, or nonbinary gender markers on their driver’s licenses:
- Arkansas
- California
- Colorado
- Connecticut
- Delaware
- District of Columbia
- Hawaii
- Maryland
- Massachusetts
- Michigan
- Minnesota
- Nevada
- New Hampshire
- New Jersey
- New Mexico
- New York
- Oregon
- Pennsylvania
- Rhode Island
- Utah
- Vermont
- Virginia
- Washington
Car Insurance Rates for Transgender and Nonbinary People
Seven states—California, Hawaii, Massachusetts, Michigan, Montana, North Carolina, and Pennsylvania—ban insurance companies from engaging in gender-based auto insurance rating, according to the CFA. Where allowed, many carriers use an applicant or policyholder’s gender when determining their insurance premium.
Bear in mind that gender is only one factor that insurers may use to determine the amount you’ll pay for car insurance. Generally, factors such as your claims and driving records have more of an impact on your insurance premium.
Currently, we do not have sufficient data to determine how auto insurance rates for transgender and nonbinary drivers stack up against the rates of cisgender policyholders.
Can You Change Your Gender on Car Insurance?
If your state enables you to change the gender on your driver’s license, then your insurer may also allow you to change your gender on your auto insurance policy. Gender change requirements vary by state. In some states, you can only change your gender by obtaining a court order, or in some cases by submitting a doctor’s letter.
Is Car Insurance Cheaper If You’re Nonbinary?
Insurance companies use many factors, which may include an applicant’s gender, when determining auto insurance rates. Currently, we do not have sufficient data to determine if nonbinary car insurance policyholders pay more or less than cisgender drivers.
Which Gender Has to Pay More for Car Insurance?
The role that gender plays in setting auto insurance rates is changing. A few states ban carriers from using gender as a rating factor, and some insurers have discontinued including gender in their underwriting guidelines. Historically, female drivers often paid less for car insurance than male motorists, but recent studies have shown that such discrepancies can vary widely by state and insurance company.
Why Does Gender Matter for Car Insurance?
Statistically, women drivers have fewer traffic accidents than their male counterparts. Consequently, some carriers offer lower rates for female drivers. However, recent state-level studies have shown that, in some states, women often pay more for auto insurance than male drivers, even if they have a good driving record.
The Bottom Line
The role that gender plays in setting auto insurance rates is changing. A few states have banned gender-based premium rating, citing gender-based discrimination, and some insurers have discontinued the practice.
Car insurance rates can vary widely by insurer and state. While gender may play a role in a carrier’s underwriting guidelines, factors such as your driving and claims records typically have the greatest impact on your insurance premium.
