Auto insurance companies use factors such as driver demographics, driving history and more to calculate individual premiums. Statistical correlations between factors such as the age of the driver and the probability of being involved in a collision are used to justify these cost differences.
But a recent study found a high correlation between another personal factor and accident rates: whether or not a driver received a COVID vaccine. Given the way auto insurance pricing works, our team was curious as to 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 Reluctance and Traffic Crash Risk” published in The American Journal of Medicine in December 2022 examined the vaccination status of people involved in car crashes. The results show a strong positive correlation between not being vaccinated and having a crash.
The study included 11,270,763 people, and 84% of participants received a COVID vaccine, while 16% did 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 those 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 for a 48% increase when other factors are controlled for.
Correlation of vaccination status compared to other risk factors
A 72% increase sounds significant on its own, but it’s important to see how it compares with 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 a COVID vaccine ranked as the fourth highest relative risk among all factors included in the table. Alcohol misuse, depression, and being listed as “male” on state registries are the only factors that have a higher relative risk than not being vaccinated.
Interestingly, the study shows that not being vaccinated has a higher relative risk than being a younger driver, one of the factors with the biggest impact on insurance rates.
There are numerous challenges to using vaccine status as a factor
Although the risk correlation between vaccination status and the likelihood of being in a road accident is strong, there are both ethical and legal reasons why it would be difficult to use vaccination status as a determinant of insurance rates.
We spoke with expert Drew Nicholson, manager of insurance and risk at North Carolina State University, to get his take on whether one’s vaccination status could be used to calculate a driver’s insurance rates.
Medical information is not usually a factor in auto insurance rates
Nicholson said he doesn’t think insurance companies 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 opinion, it is 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 medical or health 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 probably won’t become a factor in drivers’ premiums. On the practical side, current law would require drivers to choose to share their medical records in the first place.
“The Health Insurance Portability and Accountability Act (HIPAA) protects individual medical records,” said Nicholson. “To share personal medical records with an auto insurance company, the person would have to sign a consent form to share the information.”
This would create an additional step and more work for the insurance companies. It would also create a divide between people willing to share their records and those not, leaving insurance companies to figure out how to account for the difference.
Nicholson said using vaccination status also raises ethical concerns about what other medical information insurers might use to formulate premiums.
“If auto insurers were to start using medical records like vaccination status, this would open up a huge can of worms for insurance companies regarding other health factors that could lead to increased driving risk,” he said.
Those ethical issues could also lead to legal problems for auto insurers. Dealing with such legal issues could be a costly and time-consuming endeavor, and one that Nicholson believes most companies wouldn’t want to undertake.
“This would just cause legal trouble that an insurance company wouldn’t want to get into for simple auto insurance rates,” Nicholson said.
Risk correlation is not everything when it comes to insurance rates
The high degree of correlation between vaccination status and the probability of having an accident is truly noteworthy. But Nicholson pointed out that there are many factors associated with increased accident risk that insurers also don’t factor into their premiums.
“I’m sure cigarette smoking has a similar correlation,” he said. “Through the same thought process that argues for the research study [around] by not receiving the COVID vaccine, cigarette smokers would be classified as someone willing to take more risks, therefore a high risk [for insurers].”
Even the conditions that were included in the risk comparison portion of the study that show increased accident risk are not among the determining factors in the rates that insurers set for policyholders. In fact, there are likely countless variables that can correlate with increased accident risk that insurance companies don’t and probably won’t take into account.
There are also ethical concerns for the rate factors insurers currently use.
There are some factors that auto insurance companies currently consider 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 auto insurance premiums. But in all other states, credit scores can have a big impact on a person’s rates.
Based on cost data obtained from Quadrant Information Services, drivers with bad credit in the US pay nearly 81% more than drivers with good credit all other things being equal. Nicholson says there’s a risk assessment logic to that.
“Studies show that drivers with bad credit file more auto insurance claims than drivers with better credit,” he said. “Therefore, the higher your credit score, the lower your auto insurance premium will be.”
While the risk assessment Nicholson describes makes logical sense, the use of credit scores as a factor can have a huge impact on a driver’s financial situation. People with lower credit scores already pay more for auto loans and other financial products, and a drastic increase in insurance rates only makes things harder for people who are more likely to find themselves in financial trouble.
Using zip codes as a factor presents similar problems. Differences in crime rates, populations, accident rates and more between ZIP codes are logical factors in insurance premiums. However, those factors also align with significant racial differences between ZIP codes, which means that a person’s race probably also correlates with differences in how much you pay for auto insurance.
Vaccine status likely won’t affect your rates, but it’s worth considering what does
The practical, legal and ethical challenges of using a person’s vaccination status as a factor in their insurance rates means that it probably won’t be part of the calculation any time soon. But given the high degree of correlation compared to other factors that affect insurance premiums, it may be worth questioning the ethical implications of some of the factors currently used.
As mentioned above, legislators in some states have already banned the use of credit scores as a factor in auto premiums. This means that they have the ability to do the same with other factors.
There is very little chance that whether or not a person has received a COVID vaccine will factor into how much you pay for auto coverage. But compelling data on the subject provides an opportunity to examine what personal factors insurance companies can charge policyholders and whether they should be allowed to do so.
