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Drivers aren’t holding back when it comes to endorsing the use of non-driving factors in car insurance pricing, except for gender, new Forbes Advisor survey of 2,000 finds motorists who have automobile insurance.
Gender, credit, education, and occupation are typically used by car insurance companies when setting rates. The survey measured consumer opinions on these practices.
Here’s a look at what Americans think about the factors that influence auto insurance rates and how they view the cost of their own auto insurance coverage.
Battles of the Genders: Using Gender in Auto Insurance Rates
Most drivers surveyed are not in favor of car insurance companies using gender when calculating car insurance quotes, but the results between women and men differ significantly.
The majority of drivers (62%) said gender shouldn’t be a factor in car insurance quotes. Almost three-quarters of women (72%) do not support it, compared to 41% of men.
Still, women generally pay less for car insurance than men, according to a Forbes Advisor analysis of how age and gender affect car insurance rates.
In your opinion, should car insurance companies consider the gender of the driver when it comes to pricing?
Approval nearly doubles for using credit in auto insurance quotes
One of the most controversial pricing factors is the use of credit by insurance companies as a factor in auto insurance quotes. Insurers say a person’s credit correlates with the likelihood of them making an insurance claim. Many insurers place considerable importance on credit-based insurance scores when setting prices.
Yet, based on Forbes Advisor’s comparison of a 2021 survey to this year, more and more people are warming to the idea of credit as a factor in car insurance quotes:
- This year, 42% of auto insurance customers think credit should be factored into auto insurance rates.
- This is almost twice as many as last year, when only 22% approved of this practice.
More than a third (36%) of survey respondents did not think a driver’s credit score should be used to determine car insurance rates, up from 69% last year. This represents a 48% drop in the number of people who disapprove of the use of credit scores in auto insurance quotes.
To what extent do you agree or disagree with the following statement: “Car insurance companies should consider the driver’s credit score when it comes to underwriting”?
Consumer advocacy groups and some lawmakers say the use of credit-based scores unfairly raises auto insurance rates for certain demographics and is inherently discriminatory.
A Forbes Advisor analysis of car insurance rates in the 46 states that allow credit as a rating factor found that drivers with poor credit experience an average rate increase of 76% compared to drivers with good credit. This translates to approximately $1,180 per year. California, Hawaii, Massachusetts and Michigan prohibit the use of credit to set auto insurance rates.
Related: How much do car insurance rates increase due to bad credit?
Education: Twice as many drivers now say they include it
Drivers seem to embrace the use of education levels in auto insurance quotes. When asked if education should be taken into account, 46% supported the idea, marking a jump of 119% from last year, when only 21% supported it.
More than a quarter (28%) disagree that education level should be taken into account, up from 67% last year.
Insurers may include education level in auto insurance quotes when they have linked higher education to fewer insurance claims. And many car insurance companies offer education-related discounts, rewarding drivers who have earned a bachelor’s, master’s, or doctorate degree.
To what extent do you agree or disagree with the following statement: “Car insurance companies should consider the driver’s education level when it comes to underwriting”?
More than half say occupation should be a factor in car insurance quotes
More than half of drivers (58%) believe it is acceptable to use the profession in car insurance pricing. In 2021, only 36% of drivers believed that someone’s work should be considered in car insurance pricing.
Only 16% of drivers did not believe a person’s occupation should affect fares. That’s a sharp drop from 2021, when 44% said someone’s job shouldn’t be a factor in car insurance quotes.
Like other pricing factors that do not relate to actual driving, some insurers give discounts for certain professions. For example, lawyers, doctors and educators may be able to get lower rates.
To what extent do you agree or disagree with the following statement: “Car insurance companies should take the driver’s occupation into account when rating”?
2021 vs 2022: More drivers say their auto insurance rates are fair
Despite the lack of consensus on using non-driving factors in car insurance rates, most drivers think their car insurance rates are fair or have no strong opinion about them. . The survey found that 58% of respondents think their auto insurance rates are “fair” or “very fair,” up from 48% last year.
The findings come even as soaring medical costs and increasingly expensive auto repairs have led to flat rates in recent years.
Thinking about the amount you currently pay for car insurance, do you think you are paying a fair or unfair rate?
Actual driving monitoring? People feel comfortable with it
For very cautious drivers, buying auto insurance that focuses primarily on real-world driving habits may be worth considering, and more and more motorists are warming to the idea.
Usage-based auto insurance, which uses actual driving data in rates, could reduce insurance companies’ reliance on non-driving pricing factors such as credit scores, profession and education. Using telematics, these insurance programs monitor and rate actual driving, including speeding, braking and cornering.
More than half (64%) of survey respondents said they would be “very comfortable” or “somewhat comfortable” with close supervision of their driving if it could result in lower rates of car insurance. Last year, only about half (51%) were comfortable with it.
Would you be comfortable allowing a car insurance company to closely monitor your driving (e.g. with equipment installed in your car) if it allowed you to qualify for lower insurance rates for good driving?
More than a quarter think other drivers are not very good or bad
There’s no shortage of high-tech telematics programs capable of assessing a motorist’s driving safety, but that doesn’t stop humans from making their own assessments. Only 12% describe their fellow drivers as “excellent” and 28% consider them “terrible” or “not very good”.
How would you describe most other people as drivers?
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This online survey of 2,000 US drivers who own a car and have auto insurance was commissioned by Forbes Advisor and conducted by market research firm OnePoll, in accordance with the Market Research Society’s Code of Conduct. Data was collected May 20 and 21, 2022. Margin of error is +/- 2.2 points with 95% confidence. This survey was overseen by the OnePoll research team, a member of the MRS and a member of the American Association for Public Opinion Research (AAPOR). For full survey methodology, including geographic and demographic sample sizes, contact firstname.lastname@example.org.