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.
Some states and companies are beginning to recognize the issues with car insurance companies’ inflexible gender questions. And some companies are becoming more flexible. For instance, companies have increasingly begun adding “non-binary” as a gender choice. While these are small steps, they may pave the way for greater inclusivity during the car insurance application process. To help you better navigate the process, Bankrate has researched the potential roadblocks and solutions that transgender applicants may encounter during the quote and application process.
- Auto insurance companies and states are increasingly separating gender from sex assigned at birth, and some have added nonbinary gender options to car insurance applications.
- Transgender applicants who have updated the gender on their driver’s license may find it easier to select the appropriate gender on car insurance policies.
- As of 2022, 22 states and Washington, D.C. allowed drivers to change the gender on their license to male, female or nonbinary with no certification needed.
Navigating gender on car insurance applications
Most insurance companies still use the term “gender” to refer to the sex a person was assigned at birth. When an application asks for your gender, the options are often male or female. That system could force trans applicants to choose between the sex they were assigned at birth and their gender identity, which may amount to transgender discrimination.
Car insurance companies often use sex assigned at birth as a rating factor when pricing insurance policies. When factored, sex assigned at birth is used to determine a driver’s risk level, as people who are assigned male at birth (AMAB) tend to be riskier drivers than people assigned female at birth (AFAB). However, some states have banned the use of gender as a rating factor, including California, Hawaii, Massachusetts, Michigan, Montana, North Carolina and Pennsylvania.
Considering that 1.4 million adults in the U.S. identify as transgender, the issue of discrimination on car insurance applications is not a small one. Understanding your options and knowing how to navigate gender questions when applying for car insurance could help you find a policy that fits your unique needs.
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:
- Colorado (not including minors)
- New Hampshire
- New Jersey
- New Mexico
- New York
- Rhode Island
- 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:
- 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.
Frequently asked questions
What’s the best car insurance for transgender people?
Transgender individuals who are looking for the best auto insurance policies may want to consider a few different factors. First, you may want to narrow down which local companies allow you to list your correct gender identity on your policy. Independent insurance agents who work with more than one company may be best at helping you with this part of the process. From there, you may want to identify your individual preferences. Are you looking for the lowest premium? You may want to get quotes from each company and see which discount apply to you. Do you care most about customer satisfaction? You may want to research J.D. Power ratings and National Association of Insurance Commissioners (NAIC) complaint scores.
Will my rates go up if I change my gender from female to male?
Since AMAB policyholders traditionally pay more for car insurance, you might be worried about paying more for coverage if you change your driver’s license from female to male and update your gender-based car insurance rating accordingly.
Anecdotally, some transgender individuals have seen insurance rate hikes after changing their gender on their auto insurance policy, but others have seen the opposite. Ultimately, how your gender-based car insurance rating affects your particular rates depends on your state and your insurance company. That said, other factors typically influence insurance rates for drivers more heavily than gender, like driving history and annual mileage.
Can an insurance company cancel me if I’m transgender?
No, insurance companies cannot cancel your policy based on your gender. That would very likely be considered sex discrimination or gender discrimination. Auto insurance providers can only cancel your policy for a few specific reasons, including nonpayment of premium and fraud. Your policy can also be non-renewed (which means that coverage is not offered after the initial policy period), but the reasons for nonrenewal should not have anything to do with your gender identity. Some common reasons for nonrenewal are late payments and too many claims within a given time.
If you feel you have been discriminated against due to your gender while trying to apply for insurance, please reach out to your state’s department of insurance or to the American Civil Liberties Union (ACLU).