California Will No Longer Consider Gender When Determining Auto-Insurance Rates

For decades one of the worst kept secrets in the insurance industry is that women pay less in car insurance than men, simply because of their gender. The state of California is now the first to end that practice.

Thirty years ago California voters passed a measure that told auto-insurers to focus on a driver’s safety record, not their gender, when determining auto-insurance premiums. It looks like 2019 will be the year when the voters finally get their way.

California’s outgoing insurance commissioner Dave Jones recently passed new regulations that eliminates the use of gender as a factor when determining auto-insurance rates. While the regulations were passed on January 1, 2019 insurers have until July 1 to submit gender-neutral rate plans.

Traditionally women have always paid less than men, but the reality is that gender-influenced rates differed from company to company. Some found that women were less reckless drivers, while others decided that men were less of a risk. According to the San Francisco Chronicle “…a 2017 survey by the Consumer Federation of America in 10 cities, including Los Angeles, found that women ages 40 or 60 with perfect driving records were often charged more than men of similar ages, while 20-year-old women were often charged less than men of the same age with similar driving records.”.

Regardless, all insurers will now have to focus solely on a drivers safety record, without considering a person’s gender when deciding on auto-insurance rates. That means that people will be in full control of the factors that can influence their rates. If you are forced to pay more, it’s because you are an unsafe driver, not because you happen to have been born a certain gender.

Currently this change is only taking place in California. Some states are keeping the same gender policies in place, while others are adjusting in a different way. Oregon for example now allows insurers to charge different rates for three different gender categories: male, female and gender neutral.

If you want to see what your current auto-insurance rate is, or inquire about getting a new policy, we encourage you to reach out to the staff at TGS Insurance. They are experts in their fields and are always willing to work with you to find the right policy for your lifestyle. Visit www.tgsinsurance.com to learn more.

Sources:
https://www.sfchronicle.com/news/article/Gender-inequality-in-California-auto-insurance-13512456.php

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