Dear readers, it has been a busy couple of months, but I thought I'd check in after reading a barnstormer of a story from CALmatters. First, a little bit of background.
In October 2018, California Governor Jerry Brown signed the California Senate Bill SB 179, which created a new gender "nonbinary" designation for all forms of state ID - including, of course, driving licenses. This then gave drivers the option of listing their gender as nonbinary. Regular readers of the antics of the Californian government will be forgiven for not falling off their chairs at the realization that this has had some unexpected consequences.
It seems that as a follow-on, California's outgoing Insurance Commissioner Dave Jones issued a regulation last month prohibiting the use of gender in automobile insurance rating. One can speculate why he did this, but (judging from the self-centeredness of transgender people I've met around here) if I were a car insurance company, I'd be giving a hefty premium bump to anyone checking that box ; perhaps this was Mr. Jones' attempt to get out in front of that problem. Ten out of ten for forward thinking, minus several thousand for economic illiteracy - of which, more later.
The proximate effect: California's Department of Insurance has decreed that auto insurance companies can no longer grant breaks in insurance rates to teen drivers who are female, or charge young men more. So if you're a woman - in particular a young woman - in California looking to insure a car, you can expect your new rate to take a sharp move skywards:
[California auto insurers' rep] Frazier said the gender of teen drivers can result in an additional cost for boys or discount for girls of about 6 percent on their premiums.Honestly, that seems low-ball to me:
The association also cited a 2016 Insurance Institute report saying: "Men typically drive more miles than women and more often engage in risky driving practices, including not using safety belts, driving while impaired by alcohol, and speeding."Yep, I'd agree with all of that, especially for late teens/early twenties. Given that, a 6% male-over-female premium seems really low. I'd expect it to be more like 25%. We'll know for sure when insurance renewal rolls around and California girls start yelling on Twitter.
The real prize for willful ignorance or brazen lies, however, must go to the new Insurance Commissioner Ricardo Lara:
Lara supports that policy, saying in a statement: “Gender, race, ethnicity or sexual orientation are beyond your control, and it is not a fair or even an effective way to predict risk.”That's right, Ricky. Any insurance company could charge boys the same as girls with no additional risk, and quickly get every single boy in the country insuring their car with them, but they don't do so because they... like leaving huge sums of money on the table? Yes, that must be it.
Commissioner Ricardo Lara made history in 2018 by becoming the first openly gay person elected to statewide office in California’s history. Commissioner Lara previously served in the California Legislature, representing Assembly District 50 from 2010 to 2012 and Senate District 33 from 2012 to 2018. Commissioner Lara earned a BA in Journalism and Spanish with a minor in Chicano Studies from San Diego State University.I guess he skipped all the finite math classes in high school. Or worse, he know's he's talking bollocks but simply doesn't care because no-one will call him on it.
Consider yourself called on it, Ricardo.
It's possible, however, that it won't actually work out in practice as Ricky intends. We saw how this worked out in Europe after a European Court of Justice ruling. [note: link from that notorious right-of-center rag The Guardian]:
But what has happened since the rules came into force? Instead of the gap between men’s and women’s premiums narrowing, as expected, it has actually widened. In 2012, men on average paid £27 more for a car insurance policy than a woman, but rather remarkably they now they pay £101 more – nearly a four-fold increase.
What appears to be at work is that car insurance companies set a price very much according to all the other data they can find on you – without actually asking your gender. So the quote you get back reflects the risks attached to your occupation, how much you drive, the sort of car you drive and whether you have made any modifications to the car.
Perhaps this is fine with Ricky - as long as there is the appearance of fairness, and he's protecting his favored class of people from reality, this is all Working As Intended.