Study Finds Car Insurance Premiums Higher for Single, Widowed Drivers than Married

Study Finds Car Insurance Premiums Higher for Single, Widowed Drivers than Married
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July 29, 2015

A report released by consumer advocates found that some car insurance companies are hiking up premiums for single drivers and widows.

The Consumer Federation of America (CFA) found that a majority of the six major insurers charged single drivers and women whose husbands had died more than their married counterparts. State Farm is the only major insurance company that didn't factor marital status into the price of insurance.

CFA obtained quotes in 10 cities for a 30-year-old woman with a clean driving record who owns a 2005 Honda Civic. The trend persisted even when the age of the driver was increased.

On top of the trauma of losing a spouse, the study found that four of the six major insurers - GEICO, Farmers, Progressive, and Liberty – increased rates on state-mandated liability coverage for widows by an average of 20 percent. Nationwide sometimes increased rates for widows.

Single, separated, and divorced drivers were charged the same price by Farmers, Progressive, Nationwide and Liberty, but those premiums were almost always higher than those charged for married drivers. GIECO also charged married people less, but premium quotes for single, separated and divorced drivers varied.

A 2004 study by the National Institutes of Health found that single drivers had higher driving injury rates than married drivers, but CFA contends that the data for the study was collected in New Zealand in the early 1990s involving only about 140 injuries. The data also included a substantial minority of injuries sustained while driving a motorcycle.

"The widow penalty and other pricing related to marital status provides still another reason for state insurance departments to examine insurer pricing more carefully," J. Robert Hunter, CFA's Director of Insurance and former Texas Insurance Commissioner, said in a statement. "Auto insurers are increasingly using non-driving factors in this pricing, and it appears that much of this pricing is unrelated to insurer risk."

Several insurance departments have already outlawed price optimization which are premiums that are calculated based on the likelihood that the insured driver will tolerate a price increase. Drivers that are more likely to complain or switch companies when their premiums increase are less likely to see one than those who just grit their teeth and deal with it.