Youi charges single and divorced drivers 16% to 21% more for car insurance than married drivers. Why? Jenée Tibshraeny shares her view

Does your relationship status affect your ability to drive and take care of your car?

South African insurer, Youi, thinks so.

A case study done by interest.co.nz shows Youi charges divorced drivers up to 21% more than married drivers who take out comprehensive car insurance. 

Its premiums for single drivers are up to 19% more costly than that for married drivers, while its premiums for widowed drivers are up to 16% higher. 

Youi sees people in defacto relationships as relatively lower risk, charging them up to 10% more than married drivers. 

Interest.co.nz has drawn these conclusions by getting a number of comprehensive car insurance quotes from Youi - keeping all factors of a person's risk profile equal, but changing their marital status (click on the links in the tables below to get a full run down of the profiles used).

It is unaware of any other companies that sell car insurance direct in New Zealand asking prospective customers for their marital status, let alone placing so much weight on this when assessing their risk.

Youi acknowledges this is part of its underwriting process, but has declined to explain its rationale, or point to research that supports its view. 

More on the findings

Interest.co.nz found the same 40-year-old man who drove a 2014 Toyota Corolla worth $20,000, would pay an annual premium of $817 if they were divorced, compared to $703 if they were married. That's a $114, or 16%, difference.

Annual premium for 40yo driver with a $20,000 2014 Toyota Corolla
Marital Status Male % higher than married Female % higher than married
Single $813 16% $709 15%
Married $703 - $616 -
Defacto rel. $723 3% $636 3%
Divorced $817 16% $718 17%
Widowed  $808 15% $706 15%

Premium changes look similar when considering what a 30-year-old driver with a $14,000 Ford Ranger would pay depending on their relationship status.

Annual premium for a 30yo driver with a $14,000 2010 Ford Ranger
Marital Status Male % higher than married Female % higher than married
Single $1,064 16% $875 16%
Married $916 - $757
Defacto rel. $939 3% $778 3%
Divorced $1,070 17% $886 17%
Widowed  $1,065 16% $880 16%

However it appears Youi places slightly more weight on marital status when higher value cars are insured.

For example, the same 60-year-old who woman who drove a $65,000 BMW 3 Series would pay $218, or 21%, more in premiums if they were divorced, compared to if they were married. 

Annual premium for 60yo driver with a $65,000 2015 BMW 3 Series
Marital Status Male % higher than married Female % higher than married
Single $1,367 19% $1,246 19%
Married $1,147 - $1,046 -
Defacto rel. $1,233 7% $1,123 7%
Divorced $1,374 20% $1,264 21%
Widowed  $1,333 16% $1,216 16%

Youi doesn't appear to see relationship status changing one's risk profile differently depending on age. 

For example, someone driving a 2015 Mitsubishi Challenger would pay around 19% more if they were single compared to if they were married, if they were 30 or if they were 50.

Annual premium for 50yo driver with a $48,000 2015 Mitsubishi Challenger
Marital Status Male % higher than married Female % higher than married
Single $876 18% $802 19%
Married $741 - $676
Defacto rel. $805 9% $741 10%
Divorced $880 19% $810 20%
Widowed  $856 16% $783 16%
Annual premium for a 30yo driver with a $48,000 2015 Mitsubishi Challenger
Marital Status Male % higher than married Female % higher than married
Single $1,170 19% $922 19%
Married $982 - $778
Defacto rel. $1,064 8% $844 8%
Divorced $1,176 20% $932 20%
Widowed  $1,142 16% $903 16%

Youi also doesn’t see gender affecting the extent to which a driver’s risk profile might change depending on their relationship status.

In the above example, a widow would pay 16% more than a married person, regardless of whether they were a man or woman.

Jenée Tibshraeny's conclusion

I am no underwriter or relationship psychologist, but don’t suspect one’s marital status has as much of a bearing on one’s ability to drive and look after a car, as Youi asserts.

Like Youi, I will decline the opportunity to wade into this debate, which is bound to offend.

Nonetheless, I believe the real issue here is that this relationship question adds to the heap of questions Youi asks at underwriting; the more of which there are, the higher the likelihood a policyholder can make a mistake or forget to update Youi when their situation changes, and thus risk having a claim declined further down the track.

Would contacting your car insurer be one of the first things you do after you get married, lose your spouse or enter into a defacto relationship?

And what exactly is a 'defacto relationship' anyway?

You might think it’s sharing a dog with your partner of five years while living in separate cities due to work commitments, but the legal definition Youi uses might be different.

So where does this leave you when you come to making a claim and Youi says you didn’t uphold your end of the deal by giving it the information it needed to weigh up your risk profile?

The thing is, it’s not just relationship status that Youi asks about and other car insurers don’t. It’s also your employment, how frequently you use your car to commute to work or study and the colour of your car for example.

How easy would it be to mistaken your car for being ‘gold’ when it’s technically ‘champagne’, or for you to forget to tell Youi you started catching the bus to work instead of driving two days a week?

Youi even asks if you use your mobile phone while driving. Of course we are all going to say no, despite ashamedly reading the odd message at the traffic lights.

Sure, these factors arguably make a contribution to your risk profile - perhaps more validly than your relationship status.

And yes, Youi might use some discretion on these points when it comes to claim time.

But I still question what the primary goal of Youi's business model is - to ensure fairer underwriting or create stumbling blocks for policyholders.

Is saving money for being married worth the possibility of getting the colour of your car wrong as you rush through an online quote?

I will leave you to weigh up the risk.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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29 Comments

Youi - We'll get you! The only insurance company that asks for your credit card to create a quote.

... yes ... the fact that these bozos are still allowed to operate in our country is a sad indictment upon our commerce regulators ...

Youi will be ripped off .... Youi will be sorry .... Youi have been warned !

People probably drive more conservatively/defensively because their family is in the car, hence lower risk born out by stats.

Except I see families in cars being driven around as if the driver has no concern in the world about his children learning all his tailgating/ red light running habits....

Unfortunately very true. I suggest my comment is a generalization. Most normal people will change their driving habits the first time they drive their child home from the hospital.

OK! Let's take your 'sample of 1' and reduced all risk profiles (which are based on facts and history).
Build a bridge.

I suggest any insurance company should be, to the degree it is reasonable and material, entitled to disclosure.

If an insurance company isn't allowed to find out the truth about factors that materially affect the probability of risk it must drive up the cost of insurance for everybody.

It would of course be very interesting to know if there is an factual/actuarial basis link between 'driving risk' and 'marriage'. For an insurance company this is only a commercial question, they don't have to know why such a link exists (if in fact one does), just the degree to which it does and the level of discount they can apply for their customer.

Insurance premiums are certainly not suffering from deflationary forces.
The annual cost of insuring 2 cars, house & contents = at least $2500 to $3000 or more.
So we are likely to see an increase in uninsured drivers & homeowners

You can't get a mortgage drawn down without a certificate of currency confirming the property is insured, at least with most banks. Anyone who doesn't have that policy is taking a huge risk as the banks want to protect their security also.

Is anybody actually insured with Youi?
Given their les than honest sales techniques both here and in Australia, why would one trust them when the time comes for needing to make a claim?
You make a statement that is less than honest to your insurer, then your insurer will drop you like a hot brick and blacklist you. Follow up with any other company and one of the first questions is, "Have you been declined insurance?". Insurance is based on a high level of trust between parties.
Well Youi, I think it works both ways.

The premiums probably started the same initially, then they decided to ask for marital status in their applications. Youi probably analyzed their claims data, and found that divorced men tend to claim more than married men. Once they had enough data (years? decades?) then they were able to draw conclusions / percentages and applied the variances in rates for the new claims.

Data driven but tone deaf.

Imagine if they varied premiums by ethnicity.

Maybe they could use surnames and Bayesian inference to determine the premiums.

".... despite ashamedly reading the odd message at the traffic lights"
Which will increase the chance of being rear ended by a broke, uninsured driver in a following car.

The real crime here is the price being charged for insurance.

Agreed.
It's been known for years that 'couples' are less risky.
Get the hell over it people.
And if you are single, drive straight!!

When I got married and started a family my driving habits improved immensely - in my opinion at least ;-).

Nothing worse than being a bad example to my kids - future car drivers.

Time for Banks also to tweak home loan rates based on such factors ?

You think they don't already?
Laughable. Everyone profiles risk in the SAME way.

Rather than this being a case of charging some types of customers more, I think it is a scheme to get more business by giving some extra discount on the premium to some customers, without it being based on any actuarial factor...

There is no way Youi could actuarially prove the relationship based rating distinctions they apply, from their own NZ context data, given their tiny client base. The sample size would be too small to be statistically reliable. They are either using industry wide data collected by other NZ insurers or, more likely, have applied rating engines developed in other other countries and just assumed the same claims incidence experience will apply here.

t.

Now that is a freudian slip.

Congratulations on a great bit of journalism Jenee.
Companies - especially those that appear less than honourable such as Youi - need to be exposed through investigative journalism such as this. Not have you only exposed the cost of relationship status, you have also exposed the inherent risk. You are correct; informing your car insurer is going to be the least of your priorities in a relationship split; however it gives Youi an out in the instance of a claim as you have not paid the full premium for being single.
Trust Youi?

There is nothing 'new' here, all insurance companies do this. All over the world.

The IAG, Vero and Tower-owned brands that exist in the New Zealand market do not ask you to disclose your relationship status when getting a quote to buy car insurance online. So Youi is unique in a New Zealand context.

Any business has the right to set charges in the way it sees fit. And each of us has the right to buy their product or not buy it.
Seems entirely reasonably that if there are different patterns amongst different groups there are different costs to provide them insurance. An insurance company is in the position to know.
But on an entirely different matter we should have banned Youi from New Zealand because of it's fraudlent dealings which were well exposed previously.

Is this not illegal? The Human Rights Act includes "Marital Satus" as one of the prohibited grounds of discrimination. And the exception for insurance covers sex, disability, and age only where the insurer has actuarial or statistical data.

This is nothing new to any insurer. Here is how risk is calculated:
https://www.dmv.org/insurance/how-auto-insurance-companies-calculate-ris...