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20530 SEP 5 1996 The Honorable Sam Farr Member, United States House of Representatives 701 Ocean Street Santa Cruz, California 95060 Dear Congressman Farr: This letter is in response to your inquiry on behalf of your constituent, Mr. XX , regarding automobile insurance and the Americans with Disabilities Act of 1990 (ADA). Mr. XX wishes to know whether auto insurance companies may charge him more for driving a golf cart than they would charge for a standard automobile if he drives the golf cart because of his disability. We apologize for the delay in responding. The ADA prohibits unjustified discrimination in all types of insurance, including automobile insurance, provided by public accommodations. However, because of the nature of the insurance business, an insurer or other public accommodation may underwrite, classify, or administer risks that are based on, or not inconsistent with, State law, provided that such practices are not used to evade the purposes of the ADA. With respect to the purchase of insurance, the ADA allows insurance companies to charge more for insurance, or to refuse to insure someone with a disability, only if the higher charges or refusal to provide coverage is based on sound actuarial data and principles, and not on speculation. Thus, while the ADA does provide some protection for individuals with disabilities in their dealings with insurance companies, it does not prohibit the use of legitimate actuarial considerations. If an insurance company is simply charging all policy holders more for golf cart coverage without regard to disability, the question of whether this charge is legal would be determined
cc: Records, chrono, Wodatch, Magagna, Milton, McDowney, FOIA:dhj T. 8/28/96 udd\Milton\Congress\insure.far DJ 202-11-0 01-04334 -2under State insurance law and would not be an ADA issue. It would be an ADA issue, however, if the company charges more for coverage for a person with a disability who drives a golf cart than it does for others. In that case, the difference would have to be based on legitimate actuarial considerations. I hope this information is useful to you in responding to your constituent. Sincerely, Deval L. Patrick Assistant Attorney General Civil Rights Division 01-04335 MEMO Monterey July 26, 1996 lc RE: XX XX XX XX ADA COMPLIANCE Mr. XX would like to know if the Americans with Disabilities Act (ADA)
contains provisions that governs the way car insurance companies conduct business with disabled individuals. He drives a golf cart instead of a car because it is easier for him to get in and out of the vehicle. Also, he suffers from extreme motion sickness, and the golf cart allows him to drive at a very slow speed. Unfortunately, his insurance carrier (AAA of N. California) has informed him that his insurance will cost him $700 per year. If he drove a car, the insurance would only cost $300. Mr. XX believes that he should be allowed to pay the same rate as a car driver. He thinks that it is unfair to be required to pay a higher rate, since he is disabled. He has been in touch with the State Insurance Commissioner. He has also contacted McPherson's office for assistance. They informed him that they will help him deal with that agency, and that our office can help him with ADA information. 202-11-0 01-04336