Your Money Adviser: In California, Gender Can No Longer Be Considered in Setting Car Insurance Rates

The department’s analysis, based on 17 companies that make up about two-thirds of the state’s consumer car insurance market, estimated scant effect on rates over all.

The impact for any given driver, however, could “vary considerably” by the individual, by the insurer and by the type of coverage chosen, the state noted.

Janet Ruiz, a spokeswoman for the Insurance Information Institute, an industry group, said she didn’t expect California drivers over all to see a big impact on premiums, because gender wasn’t one of the top factors used in setting rates anyway.

Other states that ban the use of gender in setting rates include Hawaii, Massachusetts, Montana, North Carolina and Pennsylvania, according to the Consumer Federation of America, a nonprofit advocacy group. Most other states allow the practice, and insurers have long argued that the use of gender in setting premiums is sound actuarial practice.

Alyssa Connolly, director of marketing insights at the Zebra, a website that provides auto insurance quotes, suggested that gender as a rating factor tended to have “minimal impact” on rates across the United States. On a national level, the premium difference is about 1 percent, she said, with men having paid slightly more through 2016 and women paying more since then. Nevada, Utah and Minnesota have the greatest disparity in rates by gender, with premiums varying by 4 to 6 percent.

Douglas Heller, an insurance expert and consultant, submitted testimony to the Insurance Department in support of the change, on behalf of the Consumer Federation of California’s Education Foundation, a consumer rights group. Research he conducted with the Consumer Federation of America found that despite widespread belief to the contrary, women — particularly those over 25 — may often pay “significantly” higher rates than men with similar driving records.

“By using gender as a rating factor,” Mr. Heller said in his testimony, “insurers diminish the impact of more appropriate rating factors, such as driver safety, miles driven and driving experience.”

Article source: https://www.nytimes.com/2019/01/18/your-money/car-insurance-gender-california.html?partner=rss&emc=rss