California Auto Insurers Use of Marital Status as Rating Factor Class Action

Does being married make someone a more careful driver? The complaint for this class action alleges that certain insurers—Progressive West Insurance Company, Progressive Select Insurance Company, and United Financial Casualty Insurance Company—does use marital status as an “optional rating factor” when it calculates premiums for auto insurance in California. The complaint claims that the companies charge higher premiums to those who are single, in violation of California law.

The Progressive West Class for this action is all persons who, between April 29, 2019 and the date the class is certified in this case, paid for and were issued, reissued, or renewed private passenger motor vehicle liability insurance policies issued by Progressive West Insurance Company in California, and whose policy premiums were calculated, in whole or in part, using the “single” marital status of a “rated driver” at the time the policy was issued, reissued, or renewed.

The Progressive Select Class and United Financial Casualty Company Class are basically the same, with the substitution of the different company’s name.

According to the complaint, the companies deem to be single those “who are single and have never been married, who are legally separated from their spouses, who are divorced, who are unregistered domestic partners, or who are widowed[.]”

The practice of discriminating based on marital status violates the Rosenthal Auto Insurance Nondiscrimination (RAIN) Law, part of the California Insurance Code, as well as the civil rights Unruh Act, the complaint says, but a history is involved.

In 1988, California voters approved Proposition 103, which the complaint alleges “required insurers to be placed on equal footing with other businesses in California by subjecting insurers to laws that are applicable to other businesses” including civil rights laws, such as the Unruh Act.

In 1994, the Commissioner of the California Department of Insurance prohibited auto insurers from using marital status as a factor in calculating premiums. The prohibition was removed in 1996, and marital status was permitted to be used as an optional rating factor.

This permission for the optional use of marital status is still in effect, but the complaint alleges that it conflicts with the Unruh Act, which was amended 2005. Originally, marital status was not one of the protected categories for which discrimination was not permitted, but it was added with this change.

The RAIN Law was also amended in 2008, the complaint claims, that forbid insurers from using any of the characteristics listed in the Unruh Act as “constitut[ing] a condition or risk for which a higher rate, premium, or charge may be required of the insured for that insurance.”

The complaint quotes the California Senate Judiciary Committee’s Bill Analysis of the 2005 Unruh amendments as saying, “Marital status has nothing to do with the ability to be a responsible consumer.”

However, the complaint alleges that the insurers in this case “continue to engage in marital status discrimination when rating, assessing premiums and charging insureds for private passenger motor vehicle liability insurance in California.”

Article Type: Lawsuit
Topic: Insurance
Tags: Auto Insurance, Insurance, Insurance Rates, Marital Status, Rating Criteria