Senate approves bill to remove gender consideration from car insurance rates

A bill that would prohibit car insurance companies from using gender in calculating insurance rates passed the Senate April 5, but some insurance advocates say the change could cause rates to rise for young women.

“The prices that Delawareans pay for car insurance should be based on how they drive, not who they are,” said Sen. Kyle Evans Gay, D-Talleyville, the prime sponsor of Senate Bill 231.

The bill was created following a March report issued by Delaware’s insurance commissioner that showed on average, some women in Delaware are paying significantly higher automobile insurance premiums than men, even when all other factors are the same.

“Senate Bill 231 isn’t about driving, it’s about what drives us. We are driven to make a more equitable society, where outcomes are the result of our choices and actions, not one where we are only the sum of our stereotypes. Only when we set aside the ways in which we have benefited from or been burdened by systemic disparities can we see the importance of working toward a world without them,” said Insurance Commissioner Trinidad Navarro.

Auto insurance advocates, however, say that eliminating gender consideration could result in higher insurance premiums for young women, who are considered safer drivers than young men. The National Association of Mutual Insurance Companies and the American Property Casualty Insurance Association both issued statements April 5 saying SB 231 will impact young women drivers, who will end up subsidizing rates for young men, who are considered riskier drivers.

“The Department of Insurance has chosen to ignore the impact this bill will have on the market, and it continues to use an incomplete data set as its justification to push this misguided legislation,” said Matt Overturf, NAMIC regional vice president for the Ohio Valley and Mid-Atlantic states. “The bill ignores hard data supporting the use of gender as a rating factor and will likely increase the cost of auto insurance for thousands of Delaware women.”

NAMIC referred to a 2021 Delaware Office of Highway Safety Annual Report that shows young male drivers have the highest number of speed-related crashes in the state and account for 75 percent of all speed fatalities.

Nancy Egan, vice president of state government relations for the American Property Casualty Insurance Association, said insurers use a wide range of factors, such as driving history, gender, multi-car discounts and good student discounts in auto insurance underwriting to provide the most accurate and fair pricing for each customer. Consumers benefit from this personalized approach, she said, which helps keep costs lower and maintains Delaware’s competitive auto insurance market, resulting in more choices as consumers shop around for coverage.

“If SB 231 becomes law and insurers are no longer able to use gender in determining auto insurance pricing, many women, particularly young women, could see their auto insurance costs rise. Many insurers use gender in determining auto insurance pricing because statistics show that, in general, women have fewer accidents, and thus pay lower rates,” she said. “If Delaware lawmakers in the House want to ensure auto insurance costs remain fair and accurate for women drivers, they should vote no on SB 231 until they are able to gather more information and actuarially sound data to fully understand the bill’s impact on women.”

SB 231 passed the Senate 11-8 with two not voting. No Republicans voted for the bill; Democrat Sen. Bruce Ennis of Smyrna and Sen. Spiro Mantzavinos of Hockessin did not vote.

The bill awaits action in the House.

House Majority Leader Valerie Longhurst, D-Bear, has already come out in support of the bill.

“Having a method of transportation is key to much of our daily lives, whether it’s getting to and from work or being able to shop for necessities. Residents are required to purchase auto insurance both to drive legally, and to access our economy,” said Longhurst, prime House sponsor of the bill. “That’s why it’s vital that we ensure the system by which consumers’ premiums are set does not create different outcomes based on gender identity, especially when so many people already face persistent systemic and financial disadvantages, including the wage gap.”