Are Michigan auto insurance companies illegally charging widows and widowers more?
A group defending the state’s coverage system says it has found instances of insurers breaking the law.
A group defending the Michigan auto insurance system said it has found cases in which insurers have illegally targeted women and widows for higher premiums. If this is true, those insurers are in direct violation of state laws prohibiting the use of gender and marital status for rate calculations.
Coalition Protecting Auto No-Fault found at least three auto insurance companies breaking that law.
The group says that this places the spotlight on potential oversight issues when it comes to rating practices. This comes at a time when the Michigan auto insurance industry has been under severe criticism for its high premiums. Lawmakers have been pressured to take drastic action to correct the problem regarding the highly expensive coverage for drivers.
California insurance researcher, Doug Heller, determined that there were measurable discrepancies when using online quotes. Moreover, he found that in one case, an auto insurance company’s own filing with the Michigan Department of Insurance and Financial Services pointed to differences in the way premiums were calculated for women and widows.
Heller found that three Michigan auto insurance companies were charging women and widows considerably more.
In fact, he pointed to Esurance, Progressive and Liberty Mutual as the companies breaking state insurance laws. He said that his testing of online quotes showed that women in Detroit with identical profiles, vehicles, addresses and driving records paid 33 percent more than male counterparts with Esurance and 38 percent more with Progressive. Similar pricing discrepancies were found when repeating the quotes in the city of Brighton.
The same issue occurred with Liberty Mutual quotes, only the discrepancy was much lower. It determined that widows and widowers paid 5 percent more than drivers with other marital statuses. This issue was present regardless of the driver’s gender. Conversely, Esurance and Progressive premiums fell for men who were widowed.
These Michigan auto insurance findings are providing further fuel for lawmakers opposed to current insurance practices. “It’s both a failure on the part of the department to not find this, but also it’s part of what comes along with a weak regulatory system,” said Heller.