Looking for fairness and social equality has been one of the biggest fights during recent years. Recently, the state of California took another progressive step, now banning gender discrimination in car insurance policies for good. Thanks to a new rating regulation, insurance companies won’t be able to use gender in consideration when assessing private passenger car insurance. Such regulation came in effect on January 1st, 2019.
Several studies have been able to confirm that women were subject to higher car insurance premiums than men. Besides gender, age, education, and credit score are part of the factors that insurance companies consider when selling policies. However, thanks to the Gender Non-Discrimination in Automobile Insurance Rating Regulation, gender discrimination in car insurance policies is finally illegal in the state of California, among others who have also banned such practice.
Whether we like it or not, it is impossible to say that there is no relation between gender and car insurance. By looking at gender-based driving records and other data, we can understand how gender might affect one’s insurance policy. However, such data and actual pricings do not echo one another.
According to the Department of Motor Vehicles (DMV), males tend to cause more deathly car accidents more than females (71% in 2012). Also, men are twice more likely to die in a car accident than women (2008). Nevertheless, women tend to pay 33% more for car insurance, especially if they are single or widows. We can see that gender discrimination in car insurance policies was indeed a reality that needed to be addressed.
Dave Jones, Insurance Commissioner for the state of California, instituted the Gender Non-Discrimination in Automobile Insurance Rating Regulation. This regulation prohibits insurance companies from basing their coverage rates for private passenger vehicles on their clients’ gender. This regulation became effective a couple of weeks ago, on January 1st, 2019.
Regarding the regulation, Jones said that his priority as Insurance Commissioner was to “protect all California consumers, and these regulations ensure that auto insurance rates are based on factors within a driver’s control, rather than personal characteristics over which drivers have no control”.
The Consumer Federation of America (CFA) and the Consumer Federation of California (CFC) have raised their voice regarding the issue of gender discrimination in car insurance policies across the country. Both CFA and CFC have urged other states to take similar steps. This in order to put an end to discriminatory practices that allow insurance companies to take advantage of their clients.
Currently, only seven states, including California, have put in place regulations that ban gender discrimination in car insurance policies. Such states include Hawaii, Michigan, Montana, Massachusetts, Pennsylvania, and North Carolina. However, we expect to see more states join the list in the near future.