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Unforeseen
Consequences - Gender
Ban in Car Insurance
State regulations costs women
nearly $700 million dollars per
year in California alone. Don’t
allow yourself to become a victim
in your state.
VALCHOICE SPECIAL REPORT
March 1, 2021
EXECUTIVE SUMMARY
In January of 2019 California followed Hawaii,
Massachusetts, Montana, North Carolina and
Pennsylvania in eliminating gender from being
considered when pricing car insurance.
ValChoice examined the impact on how the gender
ban impacted residents of the Golden State. What we
found was women now pay nearly $700 million dollars
more per year than they did previously. And much of
the burden is born by those who can afford it least,
young women ages 16 to 25 years old.
Overview
2
MASSIVE PRICE DISPARITY PASSED ONTO FEMALE DRIVERS
$1.3B $670M
California is one of six states banning gender as a basis of calculating
insurance costs. As more states follow, the pricing disadvantages for all
women, especially young women, grows substantially.
THE NEW REGULATION
3
On January 1, 2019, the out-going California Insurance
Commissioner banned the use of gender in setting car insurance
rates. California voters were not asked to comment on the
regulation or pass a new law. Instead, the state insurance
commissioner Dave Jones issued a press release and set the
wheels in motion.
It’s unclear what analysis was done regarding the financial
impact the regulation would have on the state’s 27 million
licensed drivers. The short document says that “these
regulations insure [sic] that auto insurance rates are based on
factors within a driver’s control, rather than personal
characteristics over which drivers have no control.”
Nothing could be further from the truth. Women previously
paid less than men because as a population of drivers for the
reason that they drive more safely. Women are better drivers
that file fewer claims.
UNINTENDED CONSEQUENCES AND COSTS
4
ValChoice collected data published by the California
Department of Insurance (DOI) on the date the new
regulation became effective (January 1, 2019).
Following the grace period for the new regulation,
insurance companies began modifying their pricing to
conform. We analyzed pricing from the effective date
of the regulation and found the following:
• The published data represented 79.9% of the
California market
• The largest carrier in California charged men 21%
more than women prior to the new regulation.
• A handful of small carriers in the state were
overcharging women.
• The total of all the available data supported the
industry norm of women paying, on average, 4.3%
less than men.
The next few pages list the steps to ensure you
protect yourself from paying too much for inferior
coverage.
Women’s Rates Prior
to New Regulation
Price Increase for
California’s Women
& Reduction for
Men
-4.3% $670M
Prior to the new regulation,
women on average paid
nearly four percent less
than men for equivalent
insurance.
Some women
experienced price
increases as high as $700
per year.
AVOID BECOMING A VICTIM IN YOUR STATE
5
Step #1
Completely customizable results that
accurately reflect individual location
and needs
Thousands of data points and insurance
regulatory filings inform the intelligent
reports
Insurance shopping websites don’t provide consumers with
the complete picture. ValChoice delivers more information
and helps consumers understand what they should pay to
get the most value from their insurance dollars when they
need it most – when they file a claim.
FIND OUT WHAT YOU SHOULD PAY TO GET THE MOST
VALUE FROM INSURANCE COVERAGE
Visit www.valchoice.com/car-insurance/
AVOID BECOMING A VICTIM IN YOUR STATE
Single company reports are provided to
you free of charge
More comprehensive multi-company
comparison reports are available from
agents on the website
OBTAIN INDEPENDENT INSURANCE COMPANY RATINGS
6
Insurance that doesn’t pay claims is not insurance!
ValChoice measures insurance companies based on
three important criteria – price, protection (quality) and
service. No other company provides this important
independent analysis for consumers
Step #2
Visit www.valchoice.com/product/car-
insurance-rating-report/
7
ValChoice not only rates insurance companies, we also
help match consumers with agents in their states. We
take the guesswork out of finding a trustworthy advisor
who will guide consumers through the purchasing
process.
These agents represent the top performing carriers.
AVOID BECOMING A VICTIM IN
YOUR STATE
Step #3
GET MATCHED WITH AN AGENT THAT WILL HELP
Visit www.valchoice.com/find-insurance-agents/
CONCLUSION
8
Implementing regulations and passing
laws mandating equality does not
always work. Using California as an
example, by any reasonable metric,
equality was not furthered. Instead, it
institutionalizes inequality. In this case,
a $670 million tax on safe drivers is
institutionalized. Unfortunately, this
new inequality directly impacts
women, a primary constituency for
whom many would like to see
improved equality.
Gender Ban Failed
The solution is not regulations or laws.
The solution is transparency. Simply
publishing industry data enables
analytics firms like ValChoice to analyze
the data and publish easy-to-understand
results. With that data published,
females that want to do business with
companies that work to earn their
business can easily identify these
companies.
Consumers Demand Transparency
Regulators need a stronger focus on
delivering increasing levels of industry
transparency. With greater
transparency many benefits follow,
including:
• Improved industry efficiency
• Increased competition
• Better consumer decisions
Regulators Focus
METHODOLOGY
9
The 2019 California specific data used for
this analysis was collected from the
California Department of Insurance
website, Data was collected on 50 car
insurance companies representing
77.59% of the California market.
Department of Insurance Data
The analysis was performed based on
locations across: the Bay Area, the Central
Valley and Los Angeles basin. All
calculations are based on a weighted
average, using the companies California
market share for the calendar year 2019.
The percentage of female drivers in each
age range was based on information
published by the US Department of
Transportation, Federal Highway
Administration,
Representative Communities Driving Population
The analysis was done based on drivers
with 1 to 40 years of experience. This
typically translates into drivers ages 16 to
56. The California DOI does not publish
data for drivers with more than 40 years
experience.
Driver Ages Analysed
Both preferred and high-risk drivers were
analyzed. While results were similar
across driver types, the final analysis was
limited to preferred drivers.
Driver Type Analysed
How To Contact Us
ValChoice
Bedford, NH
03110
Email: info@valchoice.com
www.valchoice.com
ValChoice was founded by a Silicon Valley technology industry veteran
who was hit by a car and no insurance company would pay his medical
bills. This analysis was based on thousands of regulatory filings collected
and analyzed as part of the process for building the ValChoice car
insurance calculator.
About ValChoice

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Special Report: Nearly 700 million dollar cost to women due to car insurance gender ban

  • 1. Unforeseen Consequences - Gender Ban in Car Insurance State regulations costs women nearly $700 million dollars per year in California alone. Don’t allow yourself to become a victim in your state. VALCHOICE SPECIAL REPORT March 1, 2021
  • 2. EXECUTIVE SUMMARY In January of 2019 California followed Hawaii, Massachusetts, Montana, North Carolina and Pennsylvania in eliminating gender from being considered when pricing car insurance. ValChoice examined the impact on how the gender ban impacted residents of the Golden State. What we found was women now pay nearly $700 million dollars more per year than they did previously. And much of the burden is born by those who can afford it least, young women ages 16 to 25 years old. Overview 2 MASSIVE PRICE DISPARITY PASSED ONTO FEMALE DRIVERS $1.3B $670M California is one of six states banning gender as a basis of calculating insurance costs. As more states follow, the pricing disadvantages for all women, especially young women, grows substantially.
  • 3. THE NEW REGULATION 3 On January 1, 2019, the out-going California Insurance Commissioner banned the use of gender in setting car insurance rates. California voters were not asked to comment on the regulation or pass a new law. Instead, the state insurance commissioner Dave Jones issued a press release and set the wheels in motion. It’s unclear what analysis was done regarding the financial impact the regulation would have on the state’s 27 million licensed drivers. The short document says that “these regulations insure [sic] that auto insurance rates are based on factors within a driver’s control, rather than personal characteristics over which drivers have no control.” Nothing could be further from the truth. Women previously paid less than men because as a population of drivers for the reason that they drive more safely. Women are better drivers that file fewer claims.
  • 4. UNINTENDED CONSEQUENCES AND COSTS 4 ValChoice collected data published by the California Department of Insurance (DOI) on the date the new regulation became effective (January 1, 2019). Following the grace period for the new regulation, insurance companies began modifying their pricing to conform. We analyzed pricing from the effective date of the regulation and found the following: • The published data represented 79.9% of the California market • The largest carrier in California charged men 21% more than women prior to the new regulation. • A handful of small carriers in the state were overcharging women. • The total of all the available data supported the industry norm of women paying, on average, 4.3% less than men. The next few pages list the steps to ensure you protect yourself from paying too much for inferior coverage. Women’s Rates Prior to New Regulation Price Increase for California’s Women & Reduction for Men -4.3% $670M Prior to the new regulation, women on average paid nearly four percent less than men for equivalent insurance. Some women experienced price increases as high as $700 per year.
  • 5. AVOID BECOMING A VICTIM IN YOUR STATE 5 Step #1 Completely customizable results that accurately reflect individual location and needs Thousands of data points and insurance regulatory filings inform the intelligent reports Insurance shopping websites don’t provide consumers with the complete picture. ValChoice delivers more information and helps consumers understand what they should pay to get the most value from their insurance dollars when they need it most – when they file a claim. FIND OUT WHAT YOU SHOULD PAY TO GET THE MOST VALUE FROM INSURANCE COVERAGE Visit www.valchoice.com/car-insurance/
  • 6. AVOID BECOMING A VICTIM IN YOUR STATE Single company reports are provided to you free of charge More comprehensive multi-company comparison reports are available from agents on the website OBTAIN INDEPENDENT INSURANCE COMPANY RATINGS 6 Insurance that doesn’t pay claims is not insurance! ValChoice measures insurance companies based on three important criteria – price, protection (quality) and service. No other company provides this important independent analysis for consumers Step #2 Visit www.valchoice.com/product/car- insurance-rating-report/
  • 7. 7 ValChoice not only rates insurance companies, we also help match consumers with agents in their states. We take the guesswork out of finding a trustworthy advisor who will guide consumers through the purchasing process. These agents represent the top performing carriers. AVOID BECOMING A VICTIM IN YOUR STATE Step #3 GET MATCHED WITH AN AGENT THAT WILL HELP Visit www.valchoice.com/find-insurance-agents/
  • 8. CONCLUSION 8 Implementing regulations and passing laws mandating equality does not always work. Using California as an example, by any reasonable metric, equality was not furthered. Instead, it institutionalizes inequality. In this case, a $670 million tax on safe drivers is institutionalized. Unfortunately, this new inequality directly impacts women, a primary constituency for whom many would like to see improved equality. Gender Ban Failed The solution is not regulations or laws. The solution is transparency. Simply publishing industry data enables analytics firms like ValChoice to analyze the data and publish easy-to-understand results. With that data published, females that want to do business with companies that work to earn their business can easily identify these companies. Consumers Demand Transparency Regulators need a stronger focus on delivering increasing levels of industry transparency. With greater transparency many benefits follow, including: • Improved industry efficiency • Increased competition • Better consumer decisions Regulators Focus
  • 9. METHODOLOGY 9 The 2019 California specific data used for this analysis was collected from the California Department of Insurance website, Data was collected on 50 car insurance companies representing 77.59% of the California market. Department of Insurance Data The analysis was performed based on locations across: the Bay Area, the Central Valley and Los Angeles basin. All calculations are based on a weighted average, using the companies California market share for the calendar year 2019. The percentage of female drivers in each age range was based on information published by the US Department of Transportation, Federal Highway Administration, Representative Communities Driving Population The analysis was done based on drivers with 1 to 40 years of experience. This typically translates into drivers ages 16 to 56. The California DOI does not publish data for drivers with more than 40 years experience. Driver Ages Analysed Both preferred and high-risk drivers were analyzed. While results were similar across driver types, the final analysis was limited to preferred drivers. Driver Type Analysed
  • 10. How To Contact Us ValChoice Bedford, NH 03110 Email: info@valchoice.com www.valchoice.com ValChoice was founded by a Silicon Valley technology industry veteran who was hit by a car and no insurance company would pay his medical bills. This analysis was based on thousands of regulatory filings collected and analyzed as part of the process for building the ValChoice car insurance calculator. About ValChoice