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Car insurance for transgender applicants

Updated Mar 09, 2022
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Transgender and nonbinary drivers may face a unique set of challenges during the car insurance purchasing process. Car insurance companies typically ask for an applicant’s “gender” during the application process, and may ask the applicant to choose between only “male” and “female.” Gender identity can be complex and fluid, so these questions may be impossible for some drivers to answer. In addition, car insurance companies may ask for an applicant’s “gender” when they’re really requesting an applicant’s sex assigned at birth.

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Gender and car insurance rates

In states that allow insurance rates to be based on a person’s sex assigned at birth, AMAB individuals generally pay more for insurance than AFAB individuals. When setting rates, insurance companies look at your individual risk factors. Because AMAB individuals are more likely to get into car accidents than AFAB individuals, insurers tend to charge them more, on average, for premiums. The more likely you are to file a claim and cost the company money in claim payouts, the more you will typically pay for car insurance.

In most states, your sex assigned at birth is what insurance companies are looking for when they ask for your gender. Things get tricky when you consider that most companies do not have risk data associated with transgender or nonbinary individuals, which may be why many car insurance companies haven’t eliminated the gender question from applications entirely. However, certain states and insurance companies are making progress. Some states and insurance companies are changing the way gender is used on car insurance applications, paving the way for more fair insurance pricing models.

Changing gender on a driver’s license

Transgender auto insurance applicants may want to consider three things when seeking a policy: suitable coverage from a reputable company, affordable rates and a policy that reflects their gender. Updating your driver’s license to reflect your gender may be a helpful first step in this process.

The process to update your gender on your official documents varies from state to state. The National Center for Transgender Equality (NCTE) provides resources that may be especially helpful. First, you could check out the breakdown of states’ driver’s license gender change policies. The NCTE ranks each state with a letter grade based on how easy the process is. Nearly half of all states get an “A” letter grade — many based on legislation just passed in the last few years.

The steps to update your gender on your official records varies by state. The NCTE provides a convenient tool to help you learn how to update your gender on numerous documents, including your driver’s license, in your state.

States that provide a nonbinary option for a driver’s license

As a more nuanced understanding of gender identity is being established, more states are allowing a third option on official documents. This way, your license and other identifying documentation might be better tailored to your gender — male, female or nonbinary.

These states now offer a third option — an “X” in addition to “M” and “F” — and do not require any kind of certification to update your gender:

  • Arkansas
  • California
  • Colorado (not including minors)
  • Connecticut
  • Hawaii
  • Maine
  • Maryland
  • Massachusetts
  • Michigan
  • Minnesota
  • Nevada
  • New Hampshire
  • New Jersey
  • New Mexico
  • New York
  • Oregon
  • Pennsylvania
  • Rhode Island
  • Utah*
  • Vermont
  • Virginia
  • Washington
  • Washington, D.C.

*Note that Utah offers a gender neutral option, but its gender change form requires provider certification.

Illinois has also announced that it will offer an “X” option, but it won’t be made available until 2024.

Additionally, Michigan does not require certification to update your gender, but there is no gender-neutral option. New Hampshire is the opposite; certification is required but there is a gender-neutral option available.

Additionally, you could use the Corporate Equity Index tool from the Human Rights Campaign to search for a car insurance company that is more likely to have transgender, nonbinary or gender nonconforming options.

Gender use in car insurance rates

Trans or nonbinary drivers may face discrimination in the car insurance application process. But in some states, laws have been put in place to protect drivers of all genders. The following states do not allow gender to be used as a rating factor for car insurance:

  • California
  • Hawaii
  • Massachusetts
  • Michigan
  • Montana
  • Pennsylvania
  • North Carolina

While insurance companies in these states may still ask for an applicant’s gender, they cannot use gender to determine insurance rates for drivers. Other personal factors, including your driving history and the type of car you drive, will still impact your premium. This data allows insurance companies to rate policies based on your driving record rather than on statistical data about how likely your gender is to cause an accident. For nonbinary and transgender individuals specifically, such statistical data is very sparse, so discontinuing gender-based car insurance ratings could help reduce the potential for gender discrimination.

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Written by
Cate Deventer
Insurance Writer & Editor
Cate Deventer is a writer, editor and insurance professional with over a decade of experience in the insurance industry as a licensed insurance agent.
Edited by Insurance Editor