Being single could soon stop affecting what California drivers pay for car insurance. A newly proposed regulation would prevent insurers from using marital status when calculating private passenger auto rates.
Marital status has been permitted as an optional rating factor in California since 1996. That means two drivers with otherwise similar records can potentially receive different rates partly because one is married and the other isn’t.
California Insurance Commissioner Ricardo Lara now wants to eliminate that practice. If the proposal becomes final, insurers currently factoring marital status into their calculations would have to revise their rating plans.
The California Department of Insurance announced the proposal on September 16, arguing that premiums should reflect driving risk rather than a driver’s relationship status. It could translate into lower rates for some unmarried Californians, although the Department stresses that the regulation itself does not guarantee premiums will rise or fall.
California Already Has Three Main Rating Factors
Proposition 103 requires California auto insurers to base rates primarily on three mandatory factors: driving safety record, annual mileage, and years of driving experience.
The Insurance Commissioner can also approve additional optional factors when they have a substantial relationship to the risk of loss. Marital status has occupied that category for roughly 30 years, provided an insurer received approval to include it in its rating plan.
Lara argues that should end. “The price of your auto insurance should be based on how you drive, not whether you’re married,” he said when announcing the proposal.
Being Single Can Currently Cost More
The practical effect could be significant for drivers whose insurers currently give married customers more favorable rates. The exact impact, however, would depend on the insurer and the rest of an individual’s rating profile.
The department isn’t promising cheaper insurance for every single driver. Removing one rating factor could change how insurers distribute premiums across customers, and any resulting rate or classification changes would still require review under Proposition 103.
Registered domestic partners are currently treated as married under California insurance law, according to the department.
A Court Decision Cleared The Way
The proposal follows a July 16 decision by California’s First District Court of Appeal in Ison v. Lara. The case addressed the Insurance Commissioner’s authority over optional rating factors under Proposition 103, with the court upholding that regulatory authority.
Lara is now using that authority to pursue removal of marital status. The department has listed the measure among its regulations currently under consideration, meaning it has not yet become final.
If adopted, insurers using marital status would have to bring their rating plans into compliance through California’s existing Proposition 103 review process. For unmarried drivers who have spent years paying a marriage-related premium, that could eventually mean one less factor working against them.