Montana Legislators Talk Repeal of Unisex Car Insurance Pricing

A lawmaker trying to repeal Montana’s ban on gender consideration in car insurance pricing faced opponents citing what they see as the proposal’s discriminatory effect in a committee hearing last week.

HB 600, sponsored by Rep. Wendy Warburton (R-Havre), was heard by the House Business and Labor Committee on Friday. The bill would roll back a measure dating back to 1985 that bars insurance companies from using gender as a factor in setting premium rates; the bill would still make health insurers subject to the prohibition.

Montana is one of only a handful of states that do not allow auto insurers to take a driver’s gender into account when setting rates.

Supporters Cite ‘Math,’ ‘Facts,’ ‘Fairness’

Warburton said her proposal was based on “actuarial standards” that show prices are fairer and lower for everyone when insurers utilize gender as one of the many factors used to rate customers.

She called the unisex insurance law established in 1985 “backwards and antiquated.”

“I’ve heard examples of couples moving here from neighboring states and having to pay double for their vehicle insurance,” Warburton said.

While women would particularly benefit from premium savings, Warburton said, all drivers in the state would profit from a fairer rating system.

“I firmly believe this will be a very quick, simple way to put money back in the pockets of hardworking Montanans,” she said.

Fellow lawmaker Rep. Nancy Ballance (R-Hamilton) said her quarter-decade in the insurance industry showed her that actuarial work is more precise when more actuarially sound factors are used in rate determination.

“Including gender as a risk factor is not a gender bias,” she said.

Studies, research and actuarial findings have shown differences between male and female motorists, according to Ballance, something that the state would be remiss to keep from insurance companies that could use gender as a pricing factor to bring Montana rates down, “not just for select groups but for everyone.”

“If I could look at a driver’s license during an accident and capture statistics that said a blue-eyed person is less likely to get in an accident than a brown-eyed person, I would love to use that information,” she said. “Unfortunately that one doesn’t work—but gender does.”

Bob Biskupiak, executive director for the Independent Insurance Agents Association of Montana, also said that the actuarial foundation of risk differences between men and women on the road should be considered in insurance pricing.

“This bill is about the facts and the math,” he said. “This bill is really about financial fairness.”

Greg Van Horssen, spokesman for State Farm, said that the insurer supported HB 600, along with similar repeal efforts in the past, because most states in the U.S. allow gender to be considered.

As a nationwide company, Van Horssen said, State Farm prefers “consistency across state lines.”

The American Insurance Association also offered support to the bill.

Discrimination at Forefront of Opposition to Bill

Opponents offering testimony at the committee hearing centered their protest to HB 600 on how it related to the state’s gender discrimination laws.

Ali Bovingdon, representing Gov. Steve Bullock, said the governor’s office opposed the bill because it “runs afoul of” the Montana constitution, which “expressly protects against gender discrimination.”

The bill would reintroduce gender bias into insurers’ methods of rating their customers, according to Bovingdon, who is the governor’s deputy chief of staff.

And while a subsection of female drivers, namely younger ones, would benefit from a repeal of unisex pricing, there is an “equal number of examples on the flip side” of how HB 600 could hurt men and older women.

Linda Gryczan, representing the Montana Women’s Lobby, echoed the sentiment, telling committee members that, in other states that consider gender in pricing, the youngest female drivers get price breaks until they are around 25 years old. But after that age, “those price breaks go away.”

An Online Auto Insurance study published earlier this year showed Gryczan’s comments are likely true most of the time.

“We’ve had this law for 30 years,” she said. “Please don’t return gender bias back.”

Twenty-year-old Shawn McQuillan also testified against the bill, saying that, although he has never caused a car crash or gotten a ticket, the proposal would increase his rates “simple because I am a male.”

On the whole, actuarial tables show that younger men are most at risk for dangerous habits behind the wheel like speeding and seat belt disuse. Allowing insurers to consider gender could mean men like McQuillan would see the harshest spikes in their rates.

Marieke Beck, bureau chief for the Montana Human Rights Bureau, said such a possibility amounted to unlawful prejudice.

The bill “greenlights discrimination,” Beck said.

Lawmaker’s Bill Includes Chance to Revisit Impact

Built into HB 600 is a provision that mandates tracking of rate savings by the state auditor. Warburton said that the provision would ensure that the bill does what it was meant to—or else.

“We often do things in this body that we say will save money, that we’re convinced will save money, but we don’t seem to always be very good about tracking that,” she said. “I believe it will show that Montanans save a lot once this is implemented, and if it doesn’t turn out that way, well, I can eat my words and the next Legislature can decide what to do. But I don’t think that will be the case.”

Committee members did not take action on the bill during Friday’s hearing.

About Charles Nguyen
Charles Nguyen is an enterprising journalist who reported for Patch.com and the Desert Dispatch and was the editor in chief of the Guardian (the twice-weekly newspaper at the University of California, San Diego) before coming to Online Auto Insurance News.

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