Imagine paying more for car insurance in California simply because you’re not married. Following a recent court decision, insurance companies can continue charging higher premiums to unmarried drivers, keeping the long-standing practice intact.
The court upheld an existing state regulation for using marital status when setting premiums. With no law preventing the practice, insurance companies remain free to continue charging higher rates to single drivers.
The possible reasoning behind this practice is that married drivers, who may have a spouse and children to consider, are believed to drive more cautiously and are therefore considered less likely to be involved in collisions than unmarried drivers.
Critics, however, view the practice as discriminatory, arguing that marital status has little to do with an individual’s driving ability. Despite those concerns, the court’s decision means California insurers can continue charging different rates based on whether a driver is married.
Unmarried People Can Pay Up To $100 or More
KTLA reports that the higher premiums apply not only to single, unmarried individuals but also to widowed and divorced drivers. An appeals court ruling on July 16 rejected the lawsuit filed by a group of unmarried drivers.
The court ruled that an existing insurance regulation specifically allows insurers to consider marital status when setting rates, as long as there is evidence that it is related to insurance risk. The appeals court said this specific insurance rule was not canceled by the later anti-discrimination laws.
The appeals court also ruled against the group of unmarried individuals, stating that the insurance regulation does not violate either the Unruh Civil Rights Act or the Rosenthal Auto Insurance Nondiscrimination (RAIN) Law.
It found that California voters had already given the Insurance Commissioner the authority to create rating rules under Proposition 103, and the legislature never removed that authority.
Citing testing by the Consumer Federation of America in an amicus brief, unmarried Californians can pay roughly $56 to $100 more for auto insurance than married drivers, depending on the insurer.
Are Singles More Prone to Collisions?
According to a report by a trade group, the Personal Insurance Federation of California, actuarial data shows marital status is linked to insurance risk, with unmarried drivers statistically more likely to file claims or be involved in collisions. Insurers say this is why marital status remains one of the factors used when calculating premiums.
Notably, the practice of insurers charging on the basis of marital status has been going on since 1996. Marital status is only an optional rating factor. Under Proposition 103, insurers must primarily base rates on driving safety records, annual mileage, and years of driving experience. Marital status can only be used as an additional factor if it has a substantial relationship to insurance risk.
This means insurers cannot base premiums primarily on whether someone is married. Instead, marital status can only be used as one of several additional factors, provided it has a proven relationship to insurance risk.
Do you think marital status should be a factor in setting auto insurance rates?