Gender-based car insurance prices could mean higher rates for women – InsuranceNewsNet

Lawmakers in Dover are considering legislation (Senate Bill 231) that could make auto insurance more expensive for female drivers statewide. If passed, the bill would ban the use of gender in car insurance prices, which could increase rates for female drivers. Senate Bill 231 was introduced shortly after the Delaware The insurance commissioner published a flawed report that incorrectly concluded that women paid more than men for car insurance.

While perhaps unintentional, the commissioner’s report is misleading. The report uses highly questionable methodology and does not contain enough data to determine the effect of eliminating gender on car insurance prices. The report only looked at 35-year-old women and men, but women in other age groups often pay less because they have fewer claims and are less expensive compared to their male counterparts. Before voting on this important policy proposal, lawmakers must insist on seeing actuarially sound data demonstrating the impact of gender use in auto insurance pricing across all age groups.

Using a wide range of factors, such as driving history, gender, multi-car discounts, and good student discounts, in underwriting auto insurance allows insurers to provide the most accurate and fair prices for each vehicle. client. In addition, having a wide variety of rating factors helps keep the auto insurance market competitive for consumers, which helps keep costs down as companies compete for business.

Insurer rating plans are subject to a rigorous regulatory review process by the commissioner that ensures rating factors, such as gender, are used in full compliance with all laws, including state anti-discrimination laws. Insurers are required by law to submit data to the commissioner that supports all aspects of auto insurance pricing. For years, the commissioner has approved rates that use gender in auto insurance pricing because insurers have submitted data to his office showing that gender is an accurate predictor of the likelihood of a loss.

The vast majority of states and the D.C. allow auto insurers to use gender as a rating factor. Mountain last year it reinstated the use of gender in car insurance prices after passing a law to ban it. in January, Maryland voted against a bill to ban the use of gender in car insurance prices after the Maryland Auto Insurance Fundthe insurer of last resort, indicated in a tax analysis that, without gender as a qualifying factor, single women under the age of 30 would see an annual premium increase of about 37%.

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No one wants to pay more than they should for auto insurance, and insurance rates need to match the risk. That’s why insurers are committed to using a wide variety of objective data that has been shown to accurately predict an individual’s likelihood of sustaining an insured loss. This personalized approach provides a more complete picture of each individual and is the fairest way to determine insurance premiums, keeping prices as low as possible for the largest number of consumers.

Right now, insurers are implementing new practices that make auto insurance more affordable, like making it easier to find the best rates, working to ensure cautious drivers benefit from lower rates, and taking cost-control measures. . Insurers are also partnering with legislators across the country to improve community and traffic safety as a key step in reducing these losses. However, our work is not complete and insurers are working to increase insurance access and affordability for all communities, and to listen to our customers.

Consumers benefit when insurers can use a personalized approach to determining auto insurance premiums. It results in fair and accurate rates for all drivers and more options in the market. If SB 231 passes and lawmakers ban the use of gender in auto insurance pricing, it could result in higher auto insurance costs for many women drivers in Delawareespecially young women. Lawmakers should vote no on Senate Bill 231 until they can gather more information and actuarially sound data to fully understand the bill’s impact on women.

nancy egan Vice President and State Government

public relations consultant American Property Casualty

Insurance Association

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