Getting Car Insurance as a Transgender or Nonbinary Person

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Many people agree that it is difficult to apply for auto insurance. To get your policy underwritten, you will need to provide information such as your VIN number and current odometer reading. Transgender people may have difficulty answering even simple questions.

Auto insurance companies will ask you to identify yourself as a woman. It seems simple enough. It is easy to identify the way you are marked. Not so fast, unfortunately. Transgender applicants can have a difficult time getting car insurance. Insurers ask you for your gender but they really want to know your sex. (A quick reminder: sex idenicates all your biological characteristics, while gender refers only to the socially constructed role you identify with.

Auto quotes for transgender applicants are not always straightforward. Good news! Slowly, the waters are beginning to clear. Nonbinary gender markers are becoming more common in states, making it easier for you to change your driver’s licence gender.

Let’s first look at the reasons why trans applicants need car insurance.

Car insurance rates based on gender

Men pay more for insurance in states that have gender-based rates of insurance (which includes all states, except California). Insurance companies consider your risk factors when setting your rates. And since men are more likely to get into a major car accident than women, insurers charge them more.

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This explains why car insurance companies ask for your gender information. Although we would love for car insurance to be as simple as checking the box that you are identifying now, it is not. Insurance companies will ask for your biological sex. They’ll also cross-reference your application with your driver’s licence.

There are some positive news. It is becoming easier to update your driver’s licence. Second, states are abandoning binary gender identification. Some states offer nonbinary options, such as an “X” option. Insurance companies are now being forced to reconsider how they determine rates based upon gender.

Change of gender on a driver’s license

Three things are necessary to get the best car insurance policy for transgender individuals: affordable rates, coverage that meets all your needs, and coverage that is reflective of who you are. To meet this last requirement, you should update your driver’s licence.

This process is different from one state to the next. The National Center for Transgender Equality has many great resources. First, check out this breakdown of states’ driver’s license gender change policies. Based on the ease of the process, each state is assigned a letter grade by NTEC. Nearly half the states receive an “A” grade, many of which are based on legislation passed within the past few years.

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To do a deeper dive on how to change your driver’s license gender so you can better explore car insurance for trans applicants, we also recommend this NTEC webpage. Scroll down and select your state from the dropdown menu to access the information you need to update the license in your home state. Although it may seem simple to fill out a form and submit, nine states require documentation of sex reassignment.

Nonbinary drivers can get car insurance

Some states are also doing more to assist transgender residents, besides moving away from binary gender identifiers. These states have taken steps to make it easier for transgender individuals and applicants to car insurance.

California

California is at the forefront of limiting discriminatory rating factors for car insurance. California is one of a few states that have eliminated credit score as a rating element.

Recently, they also issued regulation prohibiting auto insurance companies from using gender as a rating factor.

Oregon

Oregon has not completely abandoned gender-based auto insurance rates. However, they have made strides to make transgender applicants’ auto quotes more transparent. Specifically, auto insurers are now required to have set rating plans for people who identify as X on their applications, just like F or M.

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Questions frequently asked

What is the best type of car insurance for transgender individuals?

It all depends on where you live, what car you drive, how many you drive and your driving record. By gathering multiple quotes from the best insurance companies and comparing your rates against state averages, you can make sure you’re getting a good deal.

Are my rates going to go up if my gender is changed from male to female?

Men traditionally pay more for auto insurance. This could make you worry about your ability to get coverage if your driver’s license is changed from female to male.

Some people report seeing insurance rates rise after changing their gender, while others report the exact opposite. It all depends on the state you live in and your insurance company. However, other factors, such as your driving record and annual mileage, can have a greater impact on your rate than your gender.

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

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People have more options to choose whether they want to change their gender or go nonbinary. What does this mean for car insurance rates

Gender Alternatives for Driver’s Licenses: A new trend

The society has come to realize that gender is complicated and that not everyone fits in the F or M box. You can identify as non-binary — not choosing either gender. Transgender can mean your gender identity does not match the gender you were given at birth. You can also be someone else.

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. You can choose “not specified”, which is indicated as an X on the license, as your gender in Oregon. You can choose “nonbinary” in Maine. California’s S.B. Gender Recognition Act 179 allows you to obtain a new driver’s licence or birth certificate (beginning in 2019), that identifies your gender as male, female, or nonbinary.

This is why it’s important. This official designation is not just a affirmation for someone who is transgender, or non-binary. If someone’s ID does not match their gender identity or appearance, they could be harassed and attacked.

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Car insurance companies and car consumers are now trying to determine what these gender options can mean for their car insurance rates.

Car insurance rates affected by gender

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. These numbers show that male drivers pose a greater risk to insurance companies. Car insurance is more expensive for men than it is for women, particularly if they are younger than 25. Over an entire lifetime, the average man pays around $15,000 more for car insurance compared to a woman, one study found.

These trends do not mean that female drivers pay less for insurance than male counterparts. 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.”

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Rates for Transgender and Non-Binary Car Insurance

Are auto insurance companies willing to offer different rates to transgender drivers and nonbinary drivers? They are trying to find 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. They could be charged with unfair discrimination if they do not. Insurers will have to file rates for drivers whose gender “is not specified” beginning January 1, 2019. Will these rates be different from existing rates for males and females? It remains to be seen.

California’s insurers are currently going through the same 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. Shultz states that the state will make sure that one’s gender identity does not result in “arbitrarily high rates”.

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Should you do the same as this Canadian guy and change your gender to save money on auto insurance? The simple answer is no. The simple answer is no. If your car insurance company finds out that you have misrepresented your gender, they can cancel your coverage and make it difficult to get insurance.