Car insurance companies use factors such as drivers’ demographic information, driving history, etc. to calculate individual premiums. Statistical correlations between factors such as the age of the driver and the probability of having a collision are used to justify these cost differences.
But a recent study found a strong correlation between another personal factor and crash rates: whether or not a driver has received a COVID vaccine. Given how car insurance pricing works, our team was curious whether or not an insurer could use a person’s vaccination status as a determining factor in their rates.
The strong correlation between vaccination status and car accident rates
A clinical research study titled “COVID Vaccine Hesitancy and Risk of a Traffic Crash” published in The American Journal of Medicine in December 2022 examined the vaccination status of people involved in traffic crashes. The results show a strong positive correlation between being unvaccinated and having a collision.
The study included 11,270,763 people, with 84% of participants having received a COVID vaccine while 16% had not. The researchers recorded 6,682 traffic accidents among the people in the study. The data showed that unvaccinated people accounted for 1,682 of these accidents, or about 25% of them. This equates to a 72% increase in the accident rate for people who did not receive a vaccine, which adjusts to a 48% increase when controlling for other factors.
Correlation of vaccination status with other risk factors
A 72% increase seems significant on its own, but it’s important to see how it compares to other risk factors. The study included a table of additional risk factors – some used by insurers and some not – to provide additional context.
Not having been vaccinated against COVID is ranked as the fourth highest relative risk among all the factors included in the table. Alcohol abuse, depression, and being listed as “male” in state records are the only factors that have a higher relative risk than not being vaccinated.
Interestingly, the study shows that not being vaccinated carries a higher relative risk than being a young driver – one of the factors with the greatest impact on insurance premiums.
There are many challenges to using vaccination status as a factor
Although the risk correlation between vaccination status and the probability of having a road accident is strong, there are both ethical and legal reasons why it would be difficult to use vaccination status as a determining factor in insurance rates.
We spoke to expert Drew Nicholson, head of insurance and risk at North Carolina State University, to find out if a person’s vaccination status could be used to calculate a driver’s insurance rates.
Medical information is generally not a factor in car insurance rates
Nicholson said he doesn’t think insurance companies will use vaccination status as a factor. One of the main reasons, he said, is that there is simply no precedent for auto insurers using medical information in their rate calculations.
“In my view, it’s highly unlikely that an insurance company would use someone’s vaccination status as a factor in determining insurance premiums,” Nicholson said. “Although life and health insurance companies use health or medical records to determine premiums, auto insurance companies historically do not use medical records to determine premiums.”
There are also practical obstacles and legal and ethical concerns.
Nicholson added that there are several other reasons why vaccination status is unlikely to become a factor in driver premiums. On a practical level, the current law would require drivers to agree to share their medical records in the first place.
“The Health Insurance Portability & Accountability Act (HIPAA) protects individual medical records,” Nicholson said. “In order to share personal medical records with an auto insurance company, the individual would need to sign a consent form to share the information.”
This would create an extra step and more work for insurance companies. It would also create a divide between people who want to share their records and those who don’t, leaving insurance companies to figure out how to account for the difference.
Nicholson said using vaccination status also presents ethical concerns about other medical information insurers could potentially use to formulate premiums.
“If car insurers started using medical records like vaccination status, it would open up a huge Pandora’s box for insurance companies when it comes to other health factors that could lead to increased risk of driving,” did he declare.
These ethical issues could also lead to legal issues for car insurers. Dealing with these legal issues could be an expensive and time-consuming undertaking, and not one that Nicholson thinks most companies would want to undertake.
“It would only cause legal problems that an insurance company wouldn’t want to get into for simple auto insurance rates,” Nicholson said.
Risk correlation isn’t everything when it comes to insurance rates
The high degree of correlation between a person’s vaccination status and the likelihood of having an accident is indeed remarkable. But Nicholson pointed out that there are many factors correlated to higher crash risk that insurers also don’t factor into their premiums.
“I’m sure smoking cigarettes has a similar correlation,” he said. “Along the same thought process that the research study supports [around] not getting a COVID vaccine, cigarette smokers would be classified as someone willing to take more risk, therefore high risk [for insurers].”
Even the conditions that were included in the risk comparison part of the study that show an increased risk of an accident are not among the determining factors in the rates that insurers set for policyholders. Indeed, there are probably countless variables that can be correlated to a higher accident risk that insurance companies do not and probably will not take into account.
There are also ethical concerns about the rate factors insurers currently use.
Car insurance companies currently take into account certain factors that may raise ethical issues. Credit scores are an example of a controversial factor. The state governments of California, Hawaii, Massachusetts and Michigan have banned the use of a person’s credit score in their car insurance premiums. But in all other states, credit scores can have a major impact on a person’s rates.
According to cost data from Quadrant Information Services, drivers with bad credit in the United States pay almost 81% more than drivers with good credit, all other factors being equal. Nicholson says there is a risk assessment logic to this.
“Studies show that drivers with poor credit file more car insurance claims than drivers with better credit,” he said. “Therefore, the higher your credit score, the lower your auto insurance premium.”
While the risk assessment described by Nicholson makes logical sense, using credit scores as a factor can have a huge impact on a driver’s financial situation. People with lower credit scores are already paying more for car loans and other financial products, and a dramatic increase in insurance rates is only making things harder for people who are more likely to be in a situation. financially difficult.
Using postal codes as a factor presents similar problems. Differences in crime rates, population, accident rates, etc. between zip codes are logical factors in insurance premiums. However, these factors also correlate with significant racial differences between ZIP codes, meaning that a person’s race is likely also correlated with differences in how much they pay for car insurance.
Vaccination status probably won’t affect your rates, but it’s worth considering what happens
The practical, legal and ethical challenges of using a person’s vaccination status as a factor in their insurance rates mean it is unlikely to be part of the calculation anytime soon. But given the high degree of correlation with other factors that affect insurance premiums, it may be worth considering the ethical implications of some of the factors currently in use.
As mentioned earlier, some state legislators have already banned the use of credit scores as a factor in auto premiums. This means they have the ability to do the same for other factors.
Whether or not a person has had a COVID shot is very unlikely to factor into the amount they pay for car coverage. But the compelling data on the matter offers an opportunity to examine what personal factors insurance companies are allowed to charge policyholders, and whether they should be allowed to do so.