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You're gay and married: How much is your car insurance discount?

By Posted : 05/11/2012

same sex marriagePresident Barack Obama can add another historic moment to his presidency: He made headlines recently when he supported same-sex marriages during an interview on ABC News.

Despite the unprecedented moment of having a president endorse same-sex marriage, the issue of whether or not to legalize such marriages is left to individual states.

North Carolina voters just approved a constitutional amendment defining marriage solely as a union between a man and a woman. North Carolina is the 30th state to ban same-sex marriages. In six states -- Connecticut, Iowa, Massachusetts, New Hampshire, New York and Vermont -- it is legal for couples of the same sex to marry.

Insurance companies are required under state law to offer the same insurance discounts to both same-sex married couples and heterosexual married couples in states where same-sex marriage is legally recognized.

Esurance, State Farm and Allstate, for instance, are among some of the big insurance firms that provide reduced car insurance rates to married gay couples in states that recognize same-sex marriage. Esurance, however, also offers the same discount to gay and lesbian couples who are domestic partners or are in civil unions in California, Illinois, Oregon, and Washington.

Recognizing gay and lesbian couples is just good business for insurers, says Thomas Roth, the president and founder of Community Marketing Inc., a San Francisco-based company that helps companies connect with gay and lesbian communities.

"Insurance sales can become a long-term income stream if the agent builds a solid relationship with the client," whether he or she is gay or straight, he says.

Danny Miller, Esurance's senior manager for public relations and communications, says his company's auto insurance discount for a same-sex couple can reach 10 percent, depending on various factors, including driving and accident history. Married people tend to file fewer claims than single people, so insurers consider married drivers a lower risk.

Auto insurance discounts for some unmarried same-sex couples

Esurance was one of the first insurers to provide discounts for domestic partners who share a policy, says Eric Madia, Esurance's director of product and actuarial management. That policy began in 2004 in California, he says, months before the state adopted the California Insurance Equality Act. The law, which took effect in 2005, prevents insurers from selling policies that treat registered domestic partners and married spouses differently.

To qualify for a discount, Madia says Esurance may require a copy of the certificate documenting the civil union or domestic partnership.

These are positive trends, says Roth, who also advises insurance companies and their agents to keep abreast of recent laws and understand the needs of gay and lesbian clients.

"One important way for an agent to deliver solid service is to know and be able to discuss the legal nuances around relationship recognition and regulations in the state" where they operate, he says. "Some states recognize same-gender relationships with marriage, domestic partnerships or civil unions. Others ban recognition of these relationships outright."

Roth continues: "So the agent has to be prepared with the right answers as questions arise. Demonstrating a genuine interest (in clients) by being able to help them maneuver through the evolving laws of their land will establish rapport, trust, long-term business, and, ultimately, referrals."

Health insurance and gay couples

When it comes to health insurance, gay couples who are not married may be less likely to share health insurance through one partner's employer.

But employment experts note that many employers have started to offer benefits to domestic partners in recent years. It's a trend, they note, that should grow as small firms start to follow the lead of larger companies that already provide domestic partner benefit plans.

As of May 2008, 9,374 employers offered domestic partner benefits, according to a Employee Benefit Research Institute report. Of that number, 8,653 are private-sector companies, with 270 of the Fortune 500 companies offering domestic partner benefits.





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