California Bans Insurers From Charging Drivers Based On Their Gender

The California Department of Insurance has come up with new rules, under which the auto insurers are now prohibited from charging drivers based on their gender.

The new rules will bring insurance prices in line with the Proposition 103 that bans unfair and discriminatory pricing and mandates rates to be based primarily on the person’s driving record and experience, leaving out personal characteristics and especially their gender, as women usually got slapped with premiums over males.

Carmer Balber, executive director of Consumer Watchdog, applauded the decision by saying: “Gender and sex have no more place in what we pay for auto insurance than race or ethnicity do. These new rules will finally end gender-based discrimination in auto insurance pricing in California.”

“It is clear that the use of gender – an innate, personal characteristic outside the control of the driver – must be eliminated to ensure that all California drivers are treated fairly under Proposition 103’s protections,” added Consumer Watchdog attorney Danny Sternberg.

The Proposition 103 requires auto insurance premiums to be based primarily on factors like driving safety record, miles driven and years of driving experience. It also prohibits discrimination based on sex, race and sexual orientation, applying state civil rights laws.

Tests conducted by the Consumer Federation of America have shown that, in some markets, one insurer would grant a price break for female drivers while another insurer in the same market would charge more those same drivers. The California Department of Insurers discovered that the gender effect on rates varies widely based on location.

Under the new rules, auto insurers must file new class plans by July 1, triggering new rates for drivers in California.