Divided court permits insurers to charge widows, divorcees, single parents and other unmarried Californians more for auto insurance

A divided California Court of Appeal has upheld Insurance Commissioner Ricardo Lara's ruling that allows insurance companies to charge Californians higher auto insurance rates solely due to marital status. Consumer Watchdog submitted an amicus brief to the Court of Appeal emphasizing that voters intended the Civil Rights Act to block such discrimination by insurers and did not authorize the Insurance Commissioner, made an elected position by Proposition 103, to override civil rights protections.

The published ruling in Ison v. Lara lets insurers keep using marital status as an optional rating factor. This leads to higher premiums for widows, divorcees, single parents and other unmarried drivers. Farmers Insurance joined Commissioner Lara in defending the regulation during the case.

The opinion references claims that unmarried drivers pay roughly $56 to $100 more than married drivers for identical auto coverage because of this rating practice.

The Consumer Federation of America, which also filed an amicus brief, highlights matching real-world data. In an April 2025 test involving a 50-year-old driver with a clean record, GEICO quoted a single driver $331.40 for six months versus $250.40 for a married driver with the same details, marking a 32 percent difference. Insurer filings with the Department of Insurance confirm the pattern: Mercury offers a 13 percent discount to married drivers and adds a 2 percent surcharge for unmarried ones, while GEICO shows a married driver's premium rising only 3.3 percent above base rate compared to a 24.3 percent increase for an unmarried driver with equivalent history.

"This amounts to Ricardo Lara endorsing insurer discrimination against widows, divorcees, single parents and all other Californians who are unmarried for personal reasons or circumstances," said Consumer Watchdog Litigation Director William Pletcher. "The commissioner's stance is disappointing. Lara was chosen to safeguard consumers yet sided with insurers to uphold a rule that penalizes people based on marital status, an outcome barred in other areas under California law."

California's Unruh Civil Rights Act explicitly bans discrimination tied to marital status, and state auto insurance nondiscrimination rules similarly forbid insurers from using a protected trait to justify higher rates.

In a detailed 30-page dissent, Presiding Justice Alison M. Tucher determined that California law no longer allows insurers or the Insurance Commissioner to discriminate against drivers on marital status grounds.

"Because insurers must follow future amendments to the Unruh Act and the Act was updated in 2005 to include marital status as a protected class, automobile insurers may no longer discriminate based on marital status. For the same reason, the Commissioner may no longer approve rates permitting such discrimination," Justice Tucher wrote.

Justice Tucher added: "On its face, the regulation appellants challenge allows insurers to charge unmarried drivers more than married drivers. For that reason, it cannot stand."

"A widow does not become a more dangerous driver when her spouse dies. A divorced parent does not suddenly become a greater insurance risk when a marriage ends," Pletcher said. "Yet Commissioner Lara believes insurers should be allowed to charge them more anyway. That is not consumer protection. It is insurance commissioner-sanctioned discrimination."

Rejecting Lara's claim that insurers may discriminate with actuarial or business justification, Justice Tucher noted: "The most obvious problem with the Commissioner's analysis is that it is untethered to the Unruh Act's statutory language. There is no hedging in the statutory text and no textual hook for the Commissioner's theory that discriminatory practices are acceptable if they have actuarial support or business justification."

The dissent further stated: "The Commissioner's analysis is also without precedent. He cites no case that holds the Unruh Act authorizes a business to discriminate on the basis of an enumerated classification, so long as the business can claim a legitimate business reason for doing so."

Justice Tucher concluded: "In sum, statutory text and case law establish that the Unruh Act simply prohibits price discrimination based on marital status, which is what Regulation 2632.5(d)(9) purports to allow."

The dissent also dismissed the idea that Commissioner Lara could enforce a regulation conflicting with updated civil rights laws: "Today, section 1861.03(a) requires insurers to comply with an Unruh Act that expressly identifies the use of marital status as unfairly discriminatory. Thus, sections 1861.03(a) and 1861.05(a) no longer authorize, indeed they prohibit, a regulation that allows insurers to discriminate based on marital status."

Justice Tucher criticized the majority for retaining an outdated regulation despite legal updates: "The majority acknowledges that Proposition 103 requires insurers to comply with civil rights laws as they are amended, but it then insulates insurers from this requirement by deploying section 51(c) to encase the 1996 regulations in amber."

The dissent ended with a direct critique of Commissioner Lara's position: "The Commissioner's extensive powers over automobile insurance rates do not include the right to pick and choose among the state's civil rights laws, requiring insurers to comply with only some of them. I would hold that the marital status regulation is invalid on its face, and appellants are entitled to a writ mandating that the Commissioner replace it."

"This case concerns whether an insurance company can charge someone more because they are widowed, divorced, or simply unmarried," Pletcher said. "Justice Tucher's dissent recognizes what common sense and California's civil rights laws require: people should be judged by how they drive, not by whether they wear a wedding ring."

Consumer Watchdog, which filed an amicus brief supporting the plaintiffs, is continuing to review today's decision.

SOURCE Consumer Watchdog