By Bob Egelko, SAN FRANCISCO CHRONICLE
https://www.sfchronicle.com/politics/article/insurance-rates-ruling-22524150.php
In a case that could affect millions of Californians, the state Supreme Court agreed Tuesday to consider whether insurance companies can be sued for their rates under a nearly 40-year-old ballot measure.
Proposition 103, approved by 51% of the voters in 1988, required insurers to obtain approval from the state’s elected insurance commissioner for all types of insurance rates, including car insurance. It also entitled vehicle owners to a 20% discount in their rates if they had a good driving record for the previous three years.
But consumer advocates say insurers have charged rates that exceed Prop 103 standards and have been shielded from lawsuits by court rulings. A state appeals court ruled in July that auto insurers could charge higher rates for unmarried drivers because of evidence that they were more likely to get into accidents, and the state Supreme Court denied review of that case.
On Tuesday, however, the court unanimously granted a request by the 9th U.S. Circuit Court of Appeals to decide whether state law requires auto insurers to charge lower rates to military officers than to enlisted military personnel. And one issue in that case is the validity of the “filed-rate doctrine,” which has prohibited insurance policy-holders from suing insurers for rates that have been approved by the state Department of Insurance.
The court “has just agreed to decide an issue that will affect every consumer in California: whether the voters authorized consumers to sue insurance companies when they overcharge people in violation of Proposition 103,” said Harvey Rosenfield, founder and chief attorney for
Consumer Watchdog and author of the 1988 ballot measure.
California courts have been divided on the question, Rosenfield told the Chronicle, but most of them have shielded insurers from lawsuits over their rates. He said his organization has been trying for 20 years to get a final decision from the state Supreme Court, which now will accept written arguments, hold a hearing and then decide the issue.
“I hope the court will confirm what voters explicitly said in Proposition 103, that civil rights laws apply to the insurance industry and that any person can sue to challenge a violation of 103,” Rosenfield said.
Lawyers for the United Services Automobile Association (USAA), the insurer in the case, did not immediately respond to a request for comment. Gabriel Sanchez, a spokesperson for the state Department of Insurance, declined to comment on the court’s action. The department will have a new commissioner in January — Jane Kim, a former San Francisco supervisor and consumer advocate who was elected last week.
The suit against USAA was filed by policy-holders who were enlisted in the armed forces and challenged the company’s practice of charging lower rates for military officers.
A federal judge ruled in favor of the insurer, based on a state law that allows insurance companies to serve a “segment” of the armed forces, such as officers. But the 9th Circuit court asked the California Supreme Court in September to decide whether the practice violated state insurance laws, and whether policy-holders could sue to challenge it.
Rosenfield said the insurance company had established separate affiliates for military officers and enlisted personnel. He contended the practice has allowed USAA and other insurers, which have their own affiliates, to sidestep Prop 103’s requirement of a 20% discount for good drivers.
The state Supreme Court case is Coleman v. United Services Automobile Association, S298496.
Consumer Watchdog · November 10, 2026
https://consumerwatchdog.org/in-the-news/san-francisco-chronicle-california-supreme-court-case-could-impact-insurance-rates-for-millions-of-residents/
© 2026 Consumer Watchdog. Printed November 11, 2026.
