Report Says Women, Widows Pay More For Michigan Auto Insurance
September 13, 2017
Michigan law is supposed to protect consumers but a new report says women and widows in Detroit and Brighton are getting gouged for auto insurance.
That’s according to the report issued by Michigan’s Coalition Protecting Auto No-Fault or CPAN, which surveyed large auto insurers in the state. It compared rates for men and women of different ages and marital status but also took into account geographic location. Rates were tested in Detroit and Brighton, to examine whether patterns changed based on geography. All drivers tested had perfect records with no accidents, tickets or claims. The report discovered some companies charging women significantly more for basic auto insurance than men – even young men who are often considered the highest risk drivers.
The report found that Progressive and Esurance charged between 10% and 38% more to women than men in Detroit – in one instance nearly $1,000 more annually – despite all drivers tested having a clean record. The report found other insurers tested, including Allstate and AAA Michigan, appeared to comply with state law and do not vary rates based on gender or marital status.
Independent Insurance Expert Doug Heller conducted the research for CPAN. He says regulators need to hold companies accountable to standards of fairness so everybody has access to fair rates. Heller hopes there will be some form of investigation, noting a lot of drivers are being overcharged in Michigan. He says drivers are required to buy coverage, so are stuck paying whatever the companies want to charge. He says that means Michigan having one of the highest levels of uninsured motorists in the country and prices that are too high for many to afford, including low income and working families. He says companies must be held accountable, which he feels would result in lower rates and more fairness in the marketplace but many drivers just tend to accept whatever the insurance companies say.
Republican State Representative Lana Theis chairs the House Committee on Insurance. She raised concerns about the validity of the study, based on the methodology and the organization that conducted it. Theis maintains the report sidesteps the real issues because everyone in the state is already paying too much for auto insurance and she’s focused on looking at ways to change the system so rates go down significantly. She says laws are already in place for consumer protection and companies that violate those should be prosecuted. Nothing is pending currently but Theis says auto insurance reform will be a subject of focus when the committee convenes. As to why large scale reforms have been so difficult in Michigan, Theis says people have looked the other direction instead of at the things that are costing drivers. She says those factors need to be adjusted and changed so that everyone sees real reduction in their auto insurance premiums. Theis commented a lot of organizations are making a lot of money on the system as it currently exists, adding having unlimited lifetime medical benefits is equivalent to writing a blank check, so of course rates are high.
The press releases issued by Theis and CPAN are provided. (JM)