We are all forced under the law to buy auto insurance in Michigan if we want to drive.
So, you might assume the state would make sure auto insurance companies aren’t discriminating against you based on your relationship status or gender.
A 7 Action News investigation found not only is the state not cracking down, it is rubber stamping such practices.
Melinda McKee’s husband Jim last fall got news that stopped them in their tracks. He had stage 4 lung cancer.
In January of this year, he died.
“I am still mourning his loss,” McKee said. “I miss him like crazy.”
She called her insurance company to cancel the insurance on his leased car and got shocking news.
“I got a letter from AAA that said because I am a widow I am in a higher risk bracket,” said McKee.
Even though she has a perfect driving record she says her rates went from under $200 for two vehicles to more than $300 for one vehicle.
“It is completely unfair,” said McKee.
“It is not legal,” said Steve Gursten, head of Michigan Auto Law. “There is a law right on point that says women can not be charged more than men, nor should they by the way, because statistically women are safer drivers.”
Gursten introduced us to McKee, who works at Michigan Auto Law.
WXYZ decided to see independently how gender and marital status impacted rates.
We requested quotes from two major companies that provide quotes online. This allowed us to change only gender or marital status on the application.
As a single woman, Allstate’s Esurance quote was $294 per month. Change the gender and that number drops to $230 for the same policy. The penalty for being a woman was 28 percent.
At Progressive the female penalty was 18 percent.
In both cases, married men paid more than single men and single women more than married women.
WXYZ went to the Insurance Alliance of Michigan. They said the state insurance commissioner rubber stamps all rates in Michigan as reasonable.
“Because the department can pull their license, can fine them. There is all sorts of recourse there if you feel you are being mistreated by the insurance company,” said Peter Kuhnmuench, executive director of the Insurance Alliance of Michigan.
WXYZ went to the State Insurance Commissioner Patrick McPharlin’s office. He was not available, but Andrea Miller, his public information officer, said gender discrimination is allowed in pricing.
“That is something legal when they are selling the group insurance policies,” said Miller.
It turns out there is a law meant to let groups, like AARP for example, offer less regulated insurance policies to save members money. Insurance companies have figured out if they file paperwork saying they are a group, they can skirt regulations.
“They are following the law,” said Miller.
So what do the insurance companies have to say?
AAA said there are systems in place meant to prevent any discrimination based on gender and marital status in pricing.
It said it would work to fix this issue and reached out to Melinda McKee.
It contacted the independent agent that sold her policy. In an e-mail to that agent AAA explained that if a rate score changes when a spouse dies the agent simply has to put in a request to maintain the lower score. AAA does not want anyone to face higher rates because they lost a spouse.
Progressive and Esurance did not confirm or deny that gender and marital status impact pricing.
Progressive released a statement saying, “We work to provide consumers accurate quotes using multiple rating factors that are actuarially justified and proven to help predict risk.”
Esurance released a statement saying, “Insurance is a highly regulated industry and Esurance is in compliance with the state laws.”