California has joined multiple states in banning discriminatory gender-based criteria in determining car insurance premiums, practices that charge higher premiums for women based solely on their gender. The Gender Non-Discrimination in Automobile Insurance Rating Regulation was put into effect this month by the California Commissioner’s Office.
Doug Jones, the California Commissioner, approved this regulation as one of his final acts before leaving office, as he believed that the industry has been inconsistent as well as discriminatory to women. Removing gender as criteria for determining prices was done in an effort to promote the use of alternative factors that are within the driver’s control, such as driving history or years of experience. Generally, predetermined or personal factors, such as race, have been banned from being used to determine insurance rates, but gender is not a banned factor nationally. The Commissioner’s Office made this change in an effort to protect all consumers from discrimination, but especially women who have experienced higher premiums than their male counterparts due solely to gender.
Other states, such Hawaii, Massachusetts, Montana, North Carolina and Pennsylvania, have instituted similar bans. Research has found little evidence to show that gender based rating is effective or accurate. In addition, the Consumer Federation of America has showcased findings which suggest that some women pay up to $100 more per year than men for car insurance due solely to their gender and discriminatory practices.
Media Resources: New York Times 2019; Consumer Federation 2019; CBS News 2019; Insurance California 2019