California Joins the Gender Bias Ban on Setting Insurance Rates

by | Feb 6, 2019 | Auto & Home

This month, California joined about a half-dozen states in banning the use of a person’s gender when assessing risk factors for car insurance, a change that could potentially alter rates for scores of drivers across the state.

California, one of the country’s most populous states, requires insurers to prioritize criteria like driver safety records and years of experience behind the wheel, when setting auto rates. It also allows them to weigh other factors such as marital status. Gender had been among the optional criteria until the beginning of this year, when a new regulation went into effect prohibiting the practice.

The new regulations ensure auto insurance rates are “based on factors within a driver’s control,” rather than “personal characteristics, over which drivers have no control.” Some insurers say female drivers are a higher risk, while others claim the polar opposite. The factoring of gender on rates has varied widely by location, but this practice is expected to end one day in the future, as more states join the gender bias ban. Insurers have until at least July 2019 to submit gender-neutral auto rating plans to the Insurance Department for review.

Charging drivers different rates based on their gender has become a discriminatory, unfair practice in 2019, and is not an accurate way to predict risk.

Removing the gender factor as criteria will equalize rates for inexperienced drivers, in particular. The gender bias ban will most likely even the playing premium playing field.  Younger men, for example, who usually pay higher rates on average, might see their premiums decline, while younger women could see increases.

Other states that ban the use of gender in setting rates include Hawaii, Massachusetts, Montana, North Carolina, and Pennsylvania.

In the meantime, here are a few questions and answers to review regarding auto insurance premiums:

1. What factors do insurers consider when setting auto insurance rates?

The rules continue to vary by state, and some exclude or restrict certain criteria. Typical factors used by insurers to assess a driver’s risk and premiums, in addition to your driving record and claims history, might include where you live, your age, education, occupation, marital status, credit history, and the type of car you drive.

2. What can I do if I think my auto premium is too high?

United Agencies Representatives, along with various consumer advocate groups, advise people to seek quotes every 6 to 12 months. This helps raise awareness of current rates and can help in reducing cost. Contact your agent, review your entire policy and verify the information is current and correct. Are you getting all the credits you qualify for? Are you being rated at the correct annual mileage?

3. What else can I do to keep my auto rates affordable?

In trying to keep rates affordable, consider raising your deductible. For example, going from $500 to $1,000 might save between 10% to 15% annually on premiums, and whatever you do, do not let your policy lapse. If you go without coverage even for a day, you’ll likely see your rates rise!  Also, bundling your coverage for renter’s or homeowner’s insurance with your auto policy with the same insurer may save an average of 8 to 15% percent annually.

Questions? Need Auto Insurance Assistance?

 Call a UA Representative Today
Toll-free 1-800-800-5880

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