How Many Millions in Car Insurance Savings Could a Supreme Court Decision Bring to Same-Sex Couples?

On the docket of court rulings made by the U.S. Supreme Court this year, one of the most anticipated and undeniably major decisions yet to be made is its ruling on the constitutionality of California’s Proposition 8, which narrowed the state definition of marriage to opposite-sex couples.

At stake is how states across the U.S. are allowed to define marriage, and the implications of that definition rings louder than a simple set of wedding bells. Couples can receive financial benefits of all sorts when they're in a state-recognized partnership, but same-sex couples in about 30 states currently cannot get most of those benefits because their states don't recognize civil unions, domestic partnerships, or same-sex marriages. That could all change after the Supreme Court makes its decision, however.

In this study, Online Auto Insurance (OAI) delves into a cost that every American has — auto insurance — and a “discount” awarded to many of them for being married to find out how much same-sex households in states where their marriages, unions, or partnerships aren’t recognized could save annually if same-sex marriage bans are struck down by the Supreme Court's decision.

The discount for being married tends to be about 10 percent for most insurers. So how much could same-sex couples save if there's a paradigm shift in the nation's marriage laws?

The Findings and How We Got There

First, the answer to the question posed above: $10.59 million a year.

Here's how we came to that number:

According to the 2010 U.S. Census, there's a total of 267,103 same-sex households in the 30 states where same-sex marriage, civil unions, and domestic partnerships are not recognized.

If you assume each of those households had only one car and paid their statewide average rate — according to 2010 data from the National Association of Insurance Commissioners (NAIC) — those 267,103 households spend around a total of $211,947,947 on car coverage annually.

Assuming that half of those couples would get married if it were legal to do so and that they ended up getting a 10 percent discount on rates for being married, they'd collectively end up paying $10.59 million a year less on auto insurance.

Here's how the results broke down by state:

States without civil unions, domestic partnerships, or same-sex marriageNo. of unmarried same-sex couplesAverage auto insurance expenditureEstimated annual premiums from same-sex couples Total amount same-sex couples could save on auto insurance annually with the marriage discount*
Total 267,103 -- $211,947,947$10,597,397
Alabama 4,878 $651.24 $3,176,748 $158,837
Alaska 950 $890.35 $845,832 $42,291
Arizona 13,552 $804.05 $10,896,485 $544,824
Arkansas3,186$662.42$2,110,470 $105,523
Florida41,712$1,036.76$43,245,333$2,162,266
Georgia17,657$749.09$13,226,682 $661,334
Idaho1,596$547.78$874,256$43,712
Indiana9,471$624.86$5,918,049 $295,902
Kansas3,176$625.16$1,985,539$99,276
Kentucky5,867$722.66$4,239,846 $211,992
Louisiana6,345$1,121.46$7,115,663$355,783
Michigan12,396$934.60$11,585,301 $579,265
Mississippi2,434$745.17$1,813,743$90,687
Missouri8,965$678.04$6,078,628 $303,931
Montana1,062$656.47$697,171$34,858
Nebraska1,846$592.69$1,094,105 $54,705
New Mexico4,967$703.90$3,496,271$174,813
North Carolina1,5085$599.90$9,049,491 $452,474
North Dakota413$528.80$218,398$10,919
Ohio17,023$619.46$10,545,067 $527,253
Oklahoma4,799$700.35$3,360,979$168,048
Pennsylvania19,108$812.15$15,518,562 $775,928
South Carolina5,618$737.74$4,144,623 $207,231
South Dakota539$525.16$283,061 $14,153
Tennessee8,939$641.16$5,731,418$286,570
Texas38,004$848.11$32,231,572 $1,611,578
Utah3,100$717.25$2,223,475$111,173
Virginia11,769$673.62$7,927,833 $396,391
West Virginia2,168$930.10$2,016,456$100,822
Wyoming478$621.08$296,876 $14,843
*Assumes 50% marriage rate and 10% married discount

What Is the Marriage 'Discount'?

It’s actually a bit of a misnomer, calling it "the marriage discount."

First, a primer on how car insurance prices generally work: An auto insurer bases your policy price not only on your driving history, but also on your personal characteristics, since that can give them an indication of how likely you are to file a claim or damage your car somehow. The higher that likelihood, the higher price you’ll see.

And one of the statistics that has proved many times over to be a reliable indicator of risk? Marital status. It turns out that married motorists get into fewer accidents than unmarried ones.

So it’s not exactly a discount; being married just happens to be one of many pricing factors that indicates to an insurer that you're less of a risk to insure, which will get you lower coverage costs.

Dick Luedke, spokesman for State Farm, explained to OAI the ‘discount’ through the lens of insurance ratings:

“We don’t reward married couples or civil union couples with discounts just for getting hitched,” he said. “What we do is compute the risk.”

Property Casualty Insurers Association of America (PCI) stated in legislative testimony about how auto coverage is priced that “the difference in experience between single and married policyholders is substantial.”

Using data from its subsidiary Independent Statistical Services, PCI pegged a number to that difference, finding that the cost of average liability and collision losses for young single male motorists is 34 percent greater than for young married male motorists.

So That’s the 'Discount,' Now Where Can Same-Sex Couples Find It?

OAI asked the question of whether or not an insurer’s reduced prices for married couples applied to couples in same-sex marriages, civil unions, and partnerships.

The short answer: Major insurers will usually apply the same pricing to same-sex marriages that they do to opposite-sex marriages, but state law dictates all of it.

That's at least true at the following insurers:

  • Progressive
  • Nationwide
  • American Family
  • Liberty Mutual
  • State Farm
  • Allstate
  • Esurance

But the last insurer — Esurance — goes above and beyond. Esurance has long been one of the more visible supporters of LGBT issues in the car insurance industry. As such, the way the auto insurer offers its married-couple rate to same-sex partners goes above and beyond how other insurers currently operate. According to this blog post, Esurance extends that married rate to drivers in domestic partnerships even in states where those partnerships aren’t legally recognized, except for in Louisiana, Missouri, Florida, and Georgia. But it’s not for lack of trying; Esurance can’t extend its pricing structure to those states because regulators there won’t allow them to.

Some of the major insurers' responses to our questions were more nuanced than others, so we'll let you read the actual responses from their spokesmen and spokeswomen. The question we posed to them was whether they rate drivers as married if they are in a domestic partnership, civil union, or same-sex marriage in a state that recognizes those formal relationship statuses. Here's what they said:

Progressive: "Progressive designates a customer as 'married' if their marriage, civil union or domestic partnership is legally recognized by their state."

Nationwide: "In states where civil unions are legal and domestic partnerships/same sex marriages are already recognized, Nationwide treats the couples as if they are spouses. However, a customer's marital status matters very little, and sometimes not at all, when Nationwide determines an auto premium rate."

American Family: "American Family Insurance does rate drivers as married when they are in a state-recognized civil union, domestic partnership, or same-sex union, but only if the statute/legislation/regulation/case law that legalizes the civil union, domestic partnership, or same-sex union requires us to."

Liberty Mutual: "Yes, we do, in every state the law permits us to."

State Farm: "This is a dynamic issue as state laws change and vary widely. In states where same-sex marriages are recognized, we will comply with applicable state and federal laws governing our products and offer the appropriate coverage and product features."

Allstate told us previously that it offers the same benefits nationwide to same-sex couples as to straight couples “in accordance with the current laws in that state.”

We also spoke to Markus Brox, of the Pellissier Agency, which is located in the predominantly gay community of West Hollywood and sells Farmers Insurance. He told us the following: “Our agency is located in the West Hollywood area, so it’s always been a question of whether we at Farmers accept a same-sex marriage situation or domestic partnership situation the same as other marriages — and we do. Farmers treats those as the same things, so it’s pretty much the same way of ratings between couples of any sex, whether they’re married or in a partnership.”

Whether same-sex couples across the country will soon all be able to enjoy this little financial boost will likely be determined in a matter of days.