Auto-Insurance Rates: Gender Discrimination Flying Under the Radar of the Federal Courts

Actuarial pricing in the auto-insurance industry is a rare example of unrestricted gender discrimination at the federal level [1]. Auto-insurance companies routinely charge drivers different insurance rates based on gender [2]. Furthermore, younger males are statistically proven to be riskier, more reckless drivers than their female counterparts [3]. As a result, auto-insurance companies charge a higher rate for teenage boys, claiming gender to be an effective proxy for risk-assessment [4]. At first glance, this practice appears to conflict with the Equal Protection Clause, which requires equal treatment on the basis of gender under the United States Constitution [5]. However, the Equal Protection Clause does not apply to private companies, but rather the actions of state and federal governments [6]. This does not exclude actuarial pricing from constitutional review; although private companies set insurance rates, state insurance commissioners approve them, positioning state action as a key facilitator of auto-insurance pricing [7,8].

In rare cases, courts allow for state action that discriminates between genders, but such practices must pass a legal test known as intermediate scrutiny [9]. Intermediate scrutiny permits gender discrimination only when it is substantially related to serving an important government interest [10]. However, the Court has never rigorously considered whether the approval of discriminatory auto-insurance pricing by state commissioners passes intermediate scrutiny. I propose that the federal courts treat state approval of auto-insurance pricing as an Equal Protection Clause issue. Furthermore, I argue that the state approval of auto-insurance pricing fails intermediate scrutiny because improving the efficiency of actuarial pricing is not an important government interest.

Gender discrimination in actual pricing satisfies the requirements necessary to constitute an Equal Protection Clause issue, permitting federal courts an opportunity to evaluate whether state approval of these practices is unjustifiably discriminatory. The Equal Protection Clause applies when an action 1) discriminates on the basis of a protected class and 2) is carried out by the state [11]. Actuarial pricing practices clearly draw gender-based distinctions, satisfying the first condition. Under the state action doctrine, the Court considers “the actions of state officers and agents… attributable to the state” [12]. Therefore, when state insurance commissioners condone actuarial pricing on the basis of gender, they implicate the state in discriminatory practices, satisfying the second condition. Legal scholars have made similar conclusions about other types of discrimination, with David Howard emphatically writing that “the state action doctrine is satisfied when the state fails to act to prevent private racial discrimination” in the Connecticut Public Interest Law Journal [13]. Shelley v. Kraemer (1948) is consistent with this logic; Shelley holds that states violate the Equal Protection Clause by enforcing discriminatory private agreements [14]. Thus, federal court systems – which possess jurisdiction over Equal Protection Clause claims – are positioned to apply the intermediate scrutiny test.

To satisfy intermediate scrutiny, state approval of gender distinctions must advance an important government interest, making it necessary to identify the asserted benefit of discrimination in actuarial pricing [15]. Greta Krippner, an Associate Professor of Sociology at the University of Michigan, explains that “insurers traditionally rely on a finite number of demographic variables to define risk classes, including gender”, when pricing their services [16]. An analysis of fatality data provided by the United States Department of Transportation yields that young men are riskier, more dangerous drivers than young women [17]. This means that young men are more likely to cost insurance companies a greater amount of money [18]. To offset this loss, insurance companies charge a higher rate for young men upfront [19]. An article in the Harvard Law Review reinforces this reasoning, explaining that companies who engage in differential pricing defend the practice by “claiming that the higher prices charged” to some groups “reflect the greater burden associated with providing services” to those groups [20]. This reasoning suggests that the purpose of gender discrimination in insurance pricing is to promote actuarial efficiency. Thus, when state officials approve gender discrimination in actuarial pricing, the asserted government interest is ensuring that private companies can effectively price their services.

While gender discrimination is substantially related to pricing efficiency for auto-insurance companies, ensuring that auto-insurance companies can more easily price their services is unlikely to qualify as an important government interest. In a paper evaluating “strategic price discrimination”, Luigi Buzzachi and Tommasso Valletti argue that price “discrimination based on immutable characteristics such as gender is a dominant strategy” that allows insurance companies to remain competitive in the market [21]. While the United States government certainly plays a role in protecting the rights of businesses and ensuring a fair market for those businesses, it does not have a constitutional obligation to do so by maximizing the ease of their pricing practices. The National Association of Insurance Commissioners holds that state insurance regulators primarily serve to ensure “insurance consumers are treated fairly” and “insurance markets are competitive”, but makes no claim that states must assist insurance companies with pricing efficiency [22]. Accordingly, state approval of gender discrimination in auto-insurance pricing likely fails the intermediate scrutiny test.

Other countries that explicitly protect gender equality have already prohibited insurance companies from charging customers differing prices on the basis of gender [23,24]. The European Union’s Charter of Fundamental Rights serves a similar purpose to the United State’s Equal Protection Clause, prohibiting government action that discriminates against citizens on the basis of gender [25, 26, 27]. Given these similar safeguards against gender discrimination, one might expect the United States and European Union to take similar approaches to auto-insurance pricing practices. However, in 2012, the European Union prohibited member states from allowing auto-insurance companies to make gender-based distinctions in actuarial pricing, labeling the practice as discriminatory and antithetical to the Charter [28]. The European Union’s classification of these practices as discriminatory as discriminatory calls into question their continued use in the United States.

The United States has not always touted gender equality as central to its character, but the country has shown enormous progress in ensuring that citizens are not discriminated against on the basis of gender. In pursuit of this goal, the judiciary should carefully scrutinize practices that draw gender distinctions. State approval of gender discrimination in auto-insurance pricing likely fails the intermediate scrutiny test, as pricing efficiency for private insurance companies is not an important government interest. Failure to reject discriminatory actuarial prices risks setting a precedent in which state officials condone discriminatory private actions and undermines the constitutionally grounded commitment to gender equality embodied in the Equal Protection Clause.

References

[1] Krippner, Greta, 2024, “The Puzzling Persistence of Gender Discrimination in Insurance,” LPE Project, June 11, https://lpeproject.org/blog/the-puzzling-persistence-of-gender-discrimination-in-insurance/.

[2] Pernagallo, Giuseppe, Antonio Punzo, and Benedetto Torrisi, 2024, “Women and Insurance Pricing Policies: A Gender-Based Analysis with GAMLSS on Two Actuarial Datasets,” Scientific Reports 14 (February): 323, https://doi.org/10.1038/s41598-024-52959-8.

[3] Cordellieri, Pierluigi, Laura Piccardi, Marco Giancola, Anna Maria Giannini, and Raffaella Nori, 2024, “On the Road Safety: Gender Differences in Risk-Taking Driving Behaviors Among Seniors Aged 65 and Older,” Geriatrics 9 (5): 136, https://doi.org/10.3390/geriatrics9050136.

[4] Lynch, Ava, 2026, “Male vs, Female Car Insurance Rates,” Thezebra.Com, March 5, https://www.thezebra.com/auto-insurance/driver/other-factors/male-vs-female-car-insurance-rates/.

[5] LII / Legal Information Institute, n.d.-a. “Equal Protection,” Accessed February 28, 2026, https://www.law.cornell.edu/wex/equal_protection.

[6] Torrez, Eileen, 2022, “What Is Title VII?” Valerian Law, November 30, https://valerian.law/blog/affirmative-action-part-1-of-2-title-vii-and-the-equal-protection-clause/#:~:text=The%20Equal%20Protection%20Clause%20applies,against%20state%20or%20federal%20entities.

[7] Mass.Gov., n.d., “Division of Insurance,” Accessed February 28, 2026, https://www.mass.gov/orgs/division-of-insurance.

[8] Washington State Office of the Insurance Commissioner, 2025, “Insurance Rates and the Commissioner’s Authority over Them,” Everyone’s Internet News Presswire, May 5, https://www.einpresswire.com/article/809702452/insurance-rates-and-the-commissioner-s-authority-over-them.

[9] LII / Legal Information Institute, n.d.-b., “Intermediate Scrutiny,” Accessed February 28, 2026, https://www.law.cornell.edu/wex/intermediate\_scrutiny.

[10] “Intermediate Scrutiny.”

[11] Torrez, “What Is Title VII?”

[12] LII / Legal Information Institute, n.d.-c., “State Action Doctrine,” Accessed March 8, 2026, https://www.law.cornell.edu/constitution-conan/amendment-14/state-action-doctrine.

[13] Howard, David M, 2017, “Rethinking State Inaction: An In-Depth Look at the State Action Doctrine in State and Lower Federal Courts,” Connecticut Public Interest Law Journal 16: 221–80.

[14] Justia Law, n.d. “Shelley v. Kraemer, 334 U.S. 1 (1948),” Accessed March 19, 2026, https://supreme.justia.com/cases/federal/us/334/1/.

[15] “Intermediate Scrutiny.”

[16] Krippner, “The Puzzling Persistence of Gender Discrimination in Insurance.”

[17] Insurance Institute for Highway Safety, 2025, “Fatality Facts 2023,” July, https://www.iihs.org/research-areas/fatality-statistics/detail/males-and-females.

[18] Lynch, “Male vs. Female Car Insurance Rates.”

[19] Ibid.

[20] “Civil Rights. Gender Discrimination. California Prohibits Gender-Based Pricing. Cal. Civ. Code § 51.6 (West Supp. 1996),” 1996, Harvard Law Review 109 (7): 1839–44, https://doi.org/10.2307/1342036.

[21] Buzzacchi, Luigi, and Tommaso M. Valletti, “Strategic Price Discrimination in Compulsory Insurance Markets,” The Geneva Risk and Insurance Review 30, no. 1 (2005): 71–97, Accessed March 8, 2026, https://www.jstor.org/stable/41959179

[22] National Association of Insurance Commissioners. “What do state insurance
regulators do?” Accessed March 19, 2026. https://content.naic.org/sites/default/files/about-state-insurance-regulators.pdf
[23] European Union Agency for Fundamental Rights. 2015. “Article 21 - Non-Discrimination | European Union Agency for Fundamental Rights.” April 25. https://fra.europa.eu/en/eu-charter/article/21-non-discrimination.

[24] European Commission, 2012, “Factsheet: EU Rules on Gender-Neutral Pricing in Insurance,” Text, December 20, https://ec.europa.eu/commission/presscorner/detail/en/https:\/\/ec.europa.eu\/commission\/presscorner\/detail\/en\/memo_12_1012.

[25] European E-Justice, n.d., “Does the Charter Apply to My Case,” Accessed March 8, 2026, https://e-justice.europa.eu/topics/your-rights/fundamental-rights/does-charter-apply-my-case_en.

[26] “Article 21 - Non-Discrimination.”

[27] “What is Title VII?”

[28] “Factsheet: EU Rules on Gender-Neutral Pricing in Insurance.”