Consumer Advocates Urge Court to End Marital-Status Discrimination in Auto Insurance; Data Proves Overcharges

LOS ANGELES, Aug. 20, 2025 -- Basing auto insurance premiums on whether a motorist is unmarried, divorced or widowed is a violation of the state's civil rights laws and Proposition 103, and neither the insurance companies nor the Insurance Commissioner has the authority to do so, Consumer Watchdog has told the California Court of Appeal in San Francisco.

Insurance reform Proposition 103 requires insurance companies to obey California's Unruh Civil Rights Act; Unruh explicitly bars discrimination based on a person's marital status. Proposition 103 allows consumers to sue to stop such discrimination, Consumer Watchdog explained in a "friend of the court" brief in a case brought by motorists challenging the use of marital status to set premiums.

Proposition 103 requires auto insurance premiums be based primarily upon three factors: a motorist's driving record, the number of miles driven annually, and their years of driving. Other optional rating factors can be approved by the commissioner – if they are lawful. 

In the case – Ison v. Commissioner of the California Department of Insurance, Farmers Insurance Exchange, and Mid-Century Insurance Company – Commissioner Lara, joined by Farmers Insurance company, argued that Proposition 103 authorizes him to approve such surcharges. In addition, Farmers argues that drivers have no right to challenge the surcharges in court.

"The Insurance Commissioner has no power to grant insurance companies a 'get out of jail free card' from California's civil rights laws," said Harvey Rosenfield, the author of Proposition 103 and the founder of Consumer Watchdog.

The brief underscores that:

• The Commissioner's Approval of Surcharges Against Drivers Who are Unmarried Directly Conflicts with Proposition 103
  

The voters passed Prop. 103 because they noted the previous insurance laws "inadequately protect[ed] consumers and allow[ed] insurance companies to charge … arbitrary rates." The voters applied the state's civil rights laws to insurance companies "to protect consumers from arbitrary insurance rates and practices." The Commissioner's decision to allow insurance companies to engage in a form of discrimination that California's civil rights law explicitly prohibits turns Proposition 103's principles of fairness upside down.

• Civil Rights Protections Bind the Commissioner as Well as Insurers
  

Proposition 103 expressly applies the Unruh Civil Rights Act and other consumer laws to insurance. The Commissioner cannot nullify those protections by administrative fiat.

• Judicial Oversight Is Essential to Prevent Abuse
  

Proposition 103 ensures consumers can sue when the Commissioner authorizes unlawful rating factors. This safeguard exists precisely because voters anticipated the risk of regulatory capture and political pressure. 

William Pletcher, head of litigation at Consumer Watchdog, explained:  "The Commissioner is effectively asking the Court to allow him to violate Californians' civil rights — a power no government official can lawfully claim. Once a government official claims unilateral authority to decide when civil rights apply — and who is protected from discrimination and who is not — you're on a very slippery slope.  The Court should make clear that no official is above the law."

Discriminatory Marital Status Overcharges – Sometimes over $100 per Policy– Documented by Consumer Federation of America

A separate amicus brief filed in the case by the Consumer Federation of America (CFA) documented the impact of using marital status as a rating factor on sample motorists' premiums. For four major insurance companies, sample drivers who were single or divorced paid between $71 and $108 more for a six-month policy. Three major companies also penalize widows with higher premiums than married drivers.

CFA also examined the impact of the marital status rating factor by race, and found that: "When insurers charge higher premiums to unmarried Californians, Black drivers face surcharges 70% of the time, while fewer than half of white drivers pay more because of their marital status. Native Americans pay the surcharge nearly 60% of the time, and Latino Californians are penalized due to marital status 58% of the time."

Background

Proposition 103, approved by voters in 1988, rolled back insurance rates, required prior approval of future increases, and prohibited unfair discrimination.  It expressly subjected insurance to California's civil rights and consumer protection laws and gave consumers the right to enforce those laws in court.

The case before the Court of Appeal — Ison v. Commissioner of Insurance — challenges the Commissioner's approval of marital-status rating factors in auto insurance.

The Alameda Superior Court ruled that the Insurance Commissioner had the power to authorize the use of marital status; the consumers appealed. The case is: Ison v. Commissioner of the California Department of Insurance, Farmers Insurance Exchange, and Mid-Century Insurance Company (A170267), before the California Court of Appeal, First Appellate District, Division Three.

Read Consumer Watchdog's brief.

Read Consumer Federation of America's brief.

Consumer Watchdog is a non-profit, non-partisan public-interest organization dedicated to protecting consumers and promoting government accountability.

SOURCE Consumer Watchdog