Insurance Companies No Longer Allowed To Use Gender When Establishing Rates - NBC 7 San Diego

Insurance Companies No Longer Allowed To Use Gender When Establishing Rates

California now sixth state to ban policy in U.S

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    Gender Removed as Factor in Insurance Rates

    Car insurance companies can no longer use gender as a factor for creating policy rates. NBC 7's Consumer Bob has more on the effects of the switch. (Published Wednesday, Jan. 23, 2019)

    Auto insurance companies in California are forced to slam the brakes on the practice of using gender when establishing policy rates.

    The state is now the sixth in the nation to prevent insurance companies from placing gender alongside the driver’s driving record, age, and marital status. The change, put into law at the beginning of the year will likely result in a change to insurance rates for thousands of drivers.

    According to some experts, it was a long time coming.

    “The rules should be simple: charge me a rate based on how I drive and not who I am,” says insurance expert who worked on the change on behalf of the Consumer Federation of California.

    “There isn’t really a strong relationship between gender and driving that’s kind of been a myth that’s been out there for a long time.”

    Heller told NBC 7 Responds the result of using gender in the list of criteria drove up rates for women drivers for a number of years.

    “The insurance companies weren’t using gender in a way that was very fair to consumers,” said Heller. “Some companies have been charging teenage girls more than teenage boys and that’s strange because there isn’t any evidence to back it up.”

    The shift in policy is expected to level rates for younger drivers and will also, according to Heller, drive down prices for women drivers.

    However, the changes will not be seen until later this year, after insurance companies submit formal policy changes to the California Department of Insurance.

    “Generally speaking if you’re a good driver than you’ll get the best rate and that’s how it should be.”