Are Gay Couples Excluded From Receiving Married Discounts on Auto Insurance?

Or: Is Esurance the Real Progressive?

Here’s a riddle: Two identical men are searching for auto insurance rates with the same company. They both are married, have the exact same driving and claim record, vehicle, credit history, age, driving experience, and live next door to each other. Why is the rate for one higher than the other?

One is in a heterosexual marriage and one is in a gay partnership.

It seems entirely unfair. After all, those involved in domestic partnerships often mimic the statistics of driving safety of their heterosexual counterparts. Any committed relationship often equates to a more “settled down” approach to life, including less risky behaviors.

Can’t Ignore the Stats

Fact is, same-sex marriage, civil unions, domestic partnerships, or whatever the state chooses to define it, are on the rise and won’t be going away. CNN reports that there has been about an 50% increase of same-sex partnerships in a ten year period up to 2010.

Same sex marriage, civil unions, domestic partnerships, even “common law” marriage all have its trials when it comes to legal recognition of partner rights. Any kind of legality has to be pursued, often multiple times, to break through layer after layer of red tape, discrimination, and status quo just to be afforded rights as a spouse or partner.

You would think that America has finally progressed beyond the nitpicking over details on the issue of gender and marriage partners by now. President Obama even now suddenly supports gay marriage; the dubious nature stems from the highly publicized proclamation during a highly competitive election year after previously being against it makes it a tad suspect. But still, progress nonetheless. Many industries and employers are more accepting of, or eliminating the negative effect of, same-sex couples.

Same Sex Unions and Insurance

There have been

many debates, discussions, lawsuits, and issues to the nature of health insurance provided to one partner by another partner’s health insurance. Much of the marriage debate is because of this reason along with the debates regarding power of attorney, heirs, benefits, and more.

In auto insurance, a “married” discount can save as much as 20% on auto insurance premiums (depending on other factors) but many still exclude same sex couples, especially if their state doesn’t recognize same sex marriages or unions.

New Hampshire, Delaware, and Hawaii all passed some form of legislation that went into effect this year recognizing same sex partnerships. However, a “civil union” wording is not the same as “marriage” according to many same-sex couples. It also matters to auto insurance companies that have issues with providing a married discount to those involved in domestic partnerships. It’s an easy out to say, “Well, we can’t offer you a discount because your state doesn’t recognize same-sex marriage.”

The Really “Progressive” Auto Insurance Companies

Nationwide

In some ways, Nationwide Insurance provides a bit more of a broader discount provided to people who are sympathetic to the LGBT community, even if they are not involved in a same-sex relationship. Paying members of the Human Rights Campaign, largely affiliated with LGBT rights, provides an affiliate discount on auto insurance. While it broadens the spectrum of LGBT support and discount options, the discount falls under the “affinity group” discount, which provides only 3-5% discount. I guess we can give Nationwide Insurance a pass; they were voted best place to work for 2012 LGBT equality.

GEICO

GEICO almost gets there by stating on their website, “GEICO recognizes all marriages and all other types of committed partnerships, such as domestic partnerships and civil unions, as provided by each state.” With that last little piece of the disclaimer, it lets them off the hook in states that do not legally recognize any form of domestic partnership.

Allstate

Forbes contributor Jim Gorzelany wrote on July 2 that Allstate’s online branch of insurance received underwriting approval in 25 states to allow discounts to same-sex partners.

If they have gotten this far, it seems to follow logic that they will attempt to get the discount permitted in all states in which they do business, which are 30. They’re almost there.

Esurance

Esurance recently announced it’s clear intention to provide an across-the-board discount to all partnerships regardless of the gender ratio or makeup. Previously, Esurance offered married discounts in California, Illinois, Oregon, and Washington. Now it’s offered to partnerships in Wisconsin, Virginia, Utah, Texas, Tennessee, South Carolina, Pennsylvania, Oklahoma, Ohio, New Jersey, Nevada, Mississippi, Minnesota, Maryland, Kentucky, Indiana, Georgia, Connecticut, Colorado, Arizona, and Alabama.

In an interview, Gary Tolman CEO of Esurance stated:

“Esurance is firmly committed to recognizing and supporting diversity for its customers… Offering additional savings to consumers regardless of where individual states stand on the issue of same-sex marriage is another measure of those commitments”.

The really cool thing that makes Esurance a truly progressive company: their domestic partnership option not only pertains to the traditional hetero married couple and same-sex civil unions, it also includes domestic partnerships of all gender combinations. Remember the “common law” partnership that is also rarely recognized as a legal union? If a man and a woman have been in a committed relationship for seven years, they should not be excluded from a marriage discount any more than a gay couple celebrating their seventh anniversary. An elderly brother and sister who have combined households to make their meager retirement income stretch further also qualify as a domestic partnership.

In auto insurance rating, it’s all about the planned matrix for underwriting and rating, all of which must be approved by the state commissioner of every state. Because same-sex unions are becoming more and more recognized, companies are simply including the option when submitting approval for discount programs offered in each state.

We might say: It’s a step in the right direction. It’s hardly “arrived”.

Image: Flickr.