Calif. prohibits gender discrimination in setting auto policy prices
The Gender Non-Discrimination in Automobile Insurance Rating Regulation became effective on January 1.
California has taken another progressive step in promoting fairness and social equality in gender discrimination.
California Insurance Commissioner Dave Jones has instituted the Gender Non-Discrimination in Automobile Insurance Rating Regulation, which outlines new regulations that prohibit the use of gender in private passenger automobile insurance rating. The regulation became effective on Jan. 1, 2019.
The regulation lowers premiums charged to women in California, who, like women across the country, have proven to pay more for auto insurance than men. This is according to research by the California Department of Insurance, Consumer Federation of America, Texas Appleseed, and the Michigan Coalition Protecting Auto No-Fault showing that women, especially those over 25 years old, pay more for auto insurance.
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Gender bias in pricing across the country
The Consumer Federation of America (CFA) and the Consumer Federation of California (CFC) commended the proactive regulation and are urging policymakers and regulators around the country should take similar steps in their states to end the discriminatory practice that has allowed insurers to charge women with good driving records more, on average, than men with similar driving records.
In a statement, J. Robert Hunter, CFA’s Director of Insurance and former Texas Insurance Commissioner, explained that the organization’s research over the years has uncovered a variety of discriminatory pricing strategies by auto insurance companies, including “erratic” gender-based pricing.
Hunter affirmed, ”Given the odd and unfair prices we see in the market, gender should be banned across the country as not determinative of risk and, like race, gender should not be used in pricing auto insurance.”
Currently, only six other states — Hawaii, Massachusetts, Michigan, Montana, North Carolina, and Pennsylvania — also prohibit gender discrimination in auto insurance rating.
Additionally, the new regulations will also eliminate the pricing problem faced by transgender drivers who, under a new California law, can have their gender identified as “non-binary” on California drivers licenses as of Jan. 1.
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