In reversal, California regulator says unmarried drivers should not pay more for auto insurance
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For decades, single, divorced and many widowed drivers have paid more for auto insurance in California than those who are married.
That could soon change.
Insurance Commissioner Ricardo Lara, in a surprising decision, announced Wednesday that he is barring auto insurers from considering marital status in setting premiums.
While the insurance department has previously defended the regulation as valid because unmarried drivers are more prone to get into accidents than married ones, it cast doubt on that position in a regulatory filing last week.
An appeals court has upheld a California regulation allowing insurers to charge unmarried drivers more for auto insurance.
The department said that while there is a correlation between marital status and accident rates, the correlation could be driven by secondary factors, such as income, educational attainment and employment.
“In light of evolving societal norms, the Commissioner deems there is insufficient justification for the continued use of marital status in automobile insurance rating,” the filing stated.
The change must go through a review to ensure it adheres to state law before it can take effect.
California would join a handful of states, including Massachusetts and Hawaii, that bar the use of marital status in setting auto insurance rates.
Unmarried drivers would see discounts in the future when insurers seek approval for new rate plans from the department.
The department will no longer allow marital status to be used for any rate plan filed after Oct. 25 under the proposed rule change, and insurers must file new plans eliminating marital status as a rating factor by July 1, 2027.
The regulatory change was included in a legal brief filed by the department in a lawsuit brought by 11 unmarried drivers seeking to overturn the policy. A state appellate panel decision upholding the marital status policy is being appealed to the state Supreme Court.
A test conducted by the Consumer Federation of America, cited in a legal brief in support of the litigation, found that unmarried drivers pay more. Single, divorced and widowed drivers got quotes in April 2025 that were up to $108 higher for six months of premiums from 4 out of 5 California carriers.
“For 30 years, insurers have been allowed to use marital status when setting rates,” Lara said in his announcement. “Today, we are taking action to end that outdated practice and reinforce a simple principle: insurance rates should be grounded in actual driving risk, not personal circumstances that have nothing to do with how someone behaves behind the wheel.”
Auto insurance rates have surged because of high inflation and soaring vehicle repair costs in the car capital of the country.
Christian Schreiber, an attorney representing the 11 drivers in the 2022 lawsuit and plaintiffs in several related class actions, called the decision a “brazen attempt” to make the lawsuit “moot” before a possible Supreme Court review. The lawsuit seeks to clarify the commissioner’s authority on such issues.
“We were certainly surprised, given we’ve been advocating for this for several years,” he said, adding it is uncertain what affect Lara’s decision could have on the proposed class actions filed against 12 insurers, which have been put on holding pending the outcome of the case against the department.
The policy allowing single, divorced or widowed drivers to pay more for auto insurance stems from 1996, when Insurance Commissioner Chuck Quackenbush included it in regulations implementing Proposition 103.
The 1988 ballot measure made the commissioner’s job an elected office with the authority to review auto, home and other insurance rates to ensure they are not excessive, inadequate or discriminatory.
Coming at a time when auto rates were skyrocketing, the measure mandated a driver’s accident record, years of experience and annual miles driven be the primary factors in setting rates, but allowed other optional factors as long as they are predictive of risk.
The 2022 lawsuit sought to rescind marital status as an optional factor, noting that sex, age, race and other personal characteristics are barred under state law from consideration. (Former Insurance Commissioner Dave Jones eliminated gender as an optional factor in 2019.)
It noted that many people are getting married later or not at all, while alleging Black and Latino people are disproportionately affected by the marital status regulation since they marry at lower rates.
It also alleged LGBTQ+ individuals are disadvantaged, though same-sex marriage in California has been legal for more than a decade and registered domestic partners are treated as married persons under the state’s insurance code.
The lawsuit suffered a setback in 2024 when a Superior Court judge sided with the department. Then, in July, the appellate panel upheld the lower court decision, despite amendments to state civil rights laws that bar marital status discrimination.
Among the legal arguments cited in the 2-1 majority opinion is that the state’s bedrock Unruh civil rights act doesn’t confer any right limited by law, in this case the authority the voter-passed proposition gives to the insurance commissioner to establish optional ratings factors that aren’t arbitrary.
A dissent by presiding Justice Alison Tucher concluded the majority misread the proposition, which she said must adhere to the state’s civil rights laws.
Rex Frazier, president of the Personal Insurance Federation of California, a trade group that represents big auto insurers, said Lara’s decision eliminates another tool insurers use to set rates that more accurately reflect risk.
“We get progressively similar rates that don’t distinguish among drivers when we just keep eliminating factors like this,” he said.
However, Lara’s policy change was applauded by Tony Hoang, executive director of Equality California, an LGBTQ+ advocacy group.
“Californians shouldn’t pay more simply because of the honest and true lives they live or their personal circumstances,” he said.
