/ Money

Not married? Watch your car insurance rise

Married figures alongside piles of coins

Should life be cheaper if you have a ring on your married finger? Sadly, it often is, and our research has discovered a new example to add to the list – car insurers are often charging more if you’re not married.

Life has long been cheaper for those who choose to share rings and nuptials.

First there are benefits like married couple’s allowance and widow’s benefit. Then there’s the advantage of being able to pass possessions and assets on to each other tax free, making capital gains tax and inheritance tax a whole lot more appealing.

And with a pro-marriage government in power it was hardly surprising to hear hints at tax breaks for married couples emerge from the recent Conservative party conference:

‘The Prime Minister has made it clear that in this Parliament the government will recognise marriage in the tax system,’ Iain Duncan Smith told his peers.

Don’t single people out

As someone who’s in a committed (mortgage, kids) – but unmarried – long-term relationship, I’ve got used to the fact that I’m often overlooked for financial incentives like these. But that doesn’t mean I’ve stopped being annoyed when another announcement is made to benefit married people.

And this time it was our own research that got my ring-less fingers shaking with anger. It found that divorced or single drivers can pay over a quarter more for their car insurance couples.

OK, luckily for me, cohabiting couples are looked on more favourably than singles, but I still find it hard to believe that marital status is any kind of indicator about driving skills. My principles about not being married make me angry on behalf of singles being unfairly penalised.

Are principles affecting premiums?

The Which? Money team surveyed twelve leading insurers and found that eight varied premiums according to the marital status of the driver. RAC charged a 27-year-old divorced or dissolved man 28% more than a cohabiting or partnered motorist, while both More Than and RIAS quoted premiums that differed by as much as 10%.

So what’s the reason for penalising singles? Seven of the eight insurers that differentiated on marital status put the differences down to their “claims experience”, but couldn’t be more specific.

Our car insurance expert Dean Sobers, who did the research, said:

‘We were surprised to find that marital status would affect what a driver would pay. We really can’t explain why this would be the case, but then again, apparently neither can the insurers.

‘The confused messages we got make it all the more important to shop around for insurance and think carefully when filling in quote forms.’

Quite. I’m often so defensive about the “are you married?” question that I choose to deflect given half the chance. Our research found that making the wrong choice – or selecting “not disclosed” – could add to the premium.

Having just renewed to a more expensive premium, I’m wondering if I ticked the “not disclosed” box on my documents. Maybe I’m just letting my principles get in the way?

Is it right for couples to get cheaper car insurance than singles?

No (63%, 143 Votes)

Yes (37%, 85 Votes)

Total Voters: 228

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Comments
Member

Playing about with online quote documents can show some revealing discrepancies.
Ive been given differing car insurance quotes for jobs (company director v manual worker v civil servant) for both myself and when the wife’s occupation has been taken.

Demographics are killing the consumer, it is also discrimination and shouldn’t be allowed. It’s not just car insurance, supermarket pricing, other forms of insurance, energy, etc, our information is being used to set prices against us all and get maximum profits, whilst killing competition in the market place.

How can I be charged a price for car insurance (or any other product) based on the average spending or actions of others?
The commission paid to switching sites is also averaged out and added to our prices, the customer really has no chance at all.

Member
John Symons says:
25 October 2011

What married couple’s allowance? On the main point, premia should be linked to risk, including men versus women, European Court of Justice! Clutching at straws now: single people more likely to be rushing to their next date? Single people less concerned about the impact of their death on other family members?

Member

Hi John there’s some more information about married couple’s allowance here – it’s only available to older couples, so wouldn’t be a factor to sway me into getting hitched!

Member
nicknick says:
28 October 2011

If insurance companies knew if we eat organic or non-organic food they would use it as a criteria. It is just a numbers game. They have sophisticated programs that do the math, and as the numbers are large they can get statistical probabilities.

Each insurer will look to target particular segments, but as the competition is fierce and we generally get the benefit of lower prices because of that, we shouldn’t complain too much. I do notice that having a long term partner (as Hannah) does put me into that ‘married’ bracket generally (which I see if I make a mistake on the online forms)

But the biggest tip is to use the comparison sites. Those insurers that are not on them and use it as a marketing ploy – yes I am talking about Direct Line here – are in my experience more expensive than the comparison sites. Although loyalty generally doesn’t pay so you should check each year (and not just one comparison site either)

Member

The price of car insurance is at a record high, we have to “compare” just to get the price we would normally have got, anyone that doesn’t pays over the odds, sometimes many hundreds of pounds more.

There’s also other big issues with insurance that I would hope which? would tackle;
– What is fully comprehensive today?
Insurance with lots of exclusions unless another fee is paid is not what I’d call comprehensive.
– Does our car insurance cover us or a vehicle?
Many no longer insure me to drive other vehicles because I have a small van, even when I’m fully comp.
Almost all now require my policy to be renewed with what amounts to a whole new policy added on, but sell it as the same insurance. If that makes sense?
If I want to keep another vehicle and insure it, my no claims suddenly don’t count, even though I can only drive one vehicle at a time and my risk of a claim remains exactly the same.
I’ve yet to find a vehicle that requires its own policy of insurance and am told, that my insurance covers me?
Which is it as it cannot be both?

Member

Frugal

The reasons why premiums are at a record high is simple – the injury claims made are at a record high – the costs of repairs are at a record high – and the number of UNinsured drivers are at a record high – you can’t have it both ways – ALL of these increases must be paid by current drivers.

Cover depends entirely on the conditions set by the Insurance company – They are free to call any insurance “comprehensive” if they decide it IS comprehensive in comparison to their Other policies – it is nothing to do with other companies.

There can be no general statements – it depends entirely on YOUR insurance – that is why you should read it carefully BEFORE you pay.the premium.

My insurance covers me for damages to my car (and any car involved in the accident if required) and my and third party injuries plus any car I drive with the owner’s permission that I don’t own or hired under a hire purchase agreement/ It says so clearly on the cover note..

The only time an insurance covers two owned cars is if BOTH cars are mentioned on the Insurance cover note.

Sorry the chances are that many companies have refused to cover you because you are regarded as a high risk due to previous problems (accidents – offences – etc) – not because you drive a small van. Being fully comp only covers you for the van you have insured – not some unknown vehicle.

How many accidents or traffic offences do you have over how many years??

I have a clean licence and no claims for 64 years.

Though you could get an expensive commercial insurance.which will cover for ‘any’ vehicle..

Member

Richard,
“The reasons why premiums are at a record high is simple – the injury claims made are at a record high – the costs of repairs are at a record high – and the number of UNinsured drivers are at a record high – you can’t have it both ways – ALL of these increases must be paid by current drivers”
* Have I made any injury claims? No
Have I generated high repair claims for my insurance company? No
Have I been driving uninsured? No
My insurance used to be charged on the basis of my car, my engine size, my personal record of insurance, etc.
In todays world, I am penalised financially by demographics – as my ex car insurance company told me, there are now more than 140 different catagories applied to each customer on deciding their insurance premiums.
Proof, if needed, comes everytime my insurance comes up for renewal each time on different things. This time it is married and single demographics, previously I have seen prices differ with employment, etc.
Never have we had so much of our information taken and stored, than we have in the past few years. It’s getting worse.
Demographic pricing is wrong, plain and simple. I can see no justification for it. It affects our petrol prices, our weekly food shopping, our insurances, etc.
Bank charges were stopped as they were not permitted because they were down to an averaging out of losses being recovered the following year, the individual wasn’t causing the actual loss they were being charged for.

“Cover depends entirely on the conditions set by the Insurance company – They are free to call any insurance “comprehensive” if they decide it IS comprehensive in comparison to their Other policies – it is nothing to do with other companies.”
* I do hear you, but comprehensive policies no longer include car hire, etc. Extra premiums are payable and often added to policies and sold as “Your years fully comprehensive cover with guarateed hire car…” unless the individual asks, the extra cost is not highlighted, which other industry is able to get away with this type of selling? None that I can think of, a good example is PPI claims now being made for the way a product has been sold being unlawful.
Comprehensive insurance is not what comprehensive cover was when I started driving 17 years ago. So many features of it can only be bought with extra premiums.

The issue with “other companies” arises, as the more people “compare” the more information is gathered and the more different companies simply match each other.

Are you aware of the £1000 agreements that car insurance companies have with each other?
Any claims that are under £1000 in value are not contested, as long as a repair bill is submitted for records. A small scratch to a bumper can have a £600 claim submitted by the claiming party, insurance companies will not contest it and pay it out.

“My insurance covers me for damages to my car (and any car involved in the accident if required) and my and third party injuries plus any car I drive with the owner’s permission that I don’t own or hired under a hire purchase agreement/ It says so clearly on the cover note..
The only time an insurance covers two owned cars is if BOTH cars are mentioned on the Insurance cover note”
* My cover is the same as yours, ie, 3rd party on any other vehicle.
However, I am informed by 99% of companies that as my vehicle is classed as a van – it always was – I am not indured to drive any other vehicle 3rd party.
The 2 companies that will insure me as I have been for the past 6 years, both want in effect, to virtually double the yearly premium, running two policies in other words.

The chances of a small van owner, fully comp, being unable to drive any other vehicle, with 3rd party cover on their policy is very high indeed.
The AA, aviva, etc, all big names state this at the end of their quotes.
Next time you have a little bit of time, hit some of the major insurance companies and attempt an online quote, then go back and change your marital status, employment, etc, and reevaluate it, watch the prices change.
This isn’t because of claims going up etc, this is based on completely on demographics.