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.

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.

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. 

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.

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.