I read an article recently by Tim Grant of the Pittsburgh Post-Gazette that was carried in our local paper. Grant discusses how major insurers raise auto insurance rates for widows. This appears to be the case regardless of the widow’s previous driving record. The justification: most major insurers charge all single people higher rates regardless of age and whether they have been married, divorced or widowed. You can read the article for yourself here. Mr. Grant could not tell whether widowers were treated as shabbily.
The issues discussed in the article were based on studies by the Consumer Federation of America, which represents about 300 consumer groups nationally. The Federation is also cited in the September 2015 issue of Consumer Reports. The CR coverage, The Truth About Car Insurance Rates, is more extensive than Mr. Grant’s but does not address directly the widow premium matter. Rather, it is the first of a series of articles that CR will be doing in the coming months. CR contracted with Quadrant Information Services to do a comprehensive analysis of insurance rates across the United States. Because insurance rates are regulated at the state level, this was a massive undertaking and showed great variations across the states and the major insurance companies. The variation among companies was not limited to their differences one from another, but also included how individual companies price the same coverage from state to state.
One thing that is clear from these articles is the tremendous disadvantage under which the consumer labors. Insurers will not divulge their pricing formulas, so we are left to do comparison shopping, a strategy recommended by Consumer Reports. They also provide information on how to fight unfair pricing, but it really goes to the heart of our financial information. Insurers mine Big Data, the information that is out there on our credit reports and buying habits, to further obfuscate their pricing. CR has some tips on what to do and what to avoid.
Finally, CR has included a petition for consumers to take action. It’s a form for the reader to complete and mail to them, which they will then deliver to state insurance commissioners. CR also provides information on how to tweet the National Association of Insurance Commissioners and to phone your state insurance commissioner. I’ll be filling out the form, but I wish that CR had not made it part of the article. I’ll have to photocopy the form in order to keep the magazine intact for future rants. A better way to get us mobilized would have been to make the form a “blow in” within the issue or to have made it a perforated tear out. Perhaps in their future issues.
This is a very important issue for all consumers, and I highly recommend that you get a copy of the recent Consumer Reports and read it carefully. Some of the information is maddening, but it’s best that we know how we are being played for fools.
And now, something to look for in the near future. Ray and I will be taking the AAA course for seniors. This is the program that many insurers encourage us to take. The enticement is the hope that completing this course “may” entitle us to as much as a 10% reduction in our insurance rate. We shall see.