Car Insurers Ripped For Raising Rates On Widows

July 28--Talk about a veiled threat: Four of six major car insurers raise rates on widows significantly -- 8 percent to 29 percent -- after the death of their husbands, according to research by a consumer advocacy group.

Only one, State Farm, did not change rates at all. Geico averaged a 29 percent increase, the research found.

"Hiking rates on women whose husbands die seems both unfair and inhumane," said Stephen Brobeck, the Consumer Federation of America's executive director. "Why don't insurers instead emphasize driving-related factors such as accidents, traffic violations and miles driven in their pricing?"

An industry organization said insurers use underwriting criteria that have been approved by state regulators and have been demonstrated for decades to be predictive of loss.

"Auto insurance is a highly competitive business and most people find they have an array of policy options, at various prices, to choose from," said Robert Hartwig, president of the Insurance Information Institute. "Consumers concerned about the price of their auto insurance are encouraged to shop around to find the policy that best suits their needs and budget."

Another way to phrase this: Many companies give discounts for being married.

Rates at most major companies tend to be higher for single, separated and divorced drivers than for married ones, the consumer group found. It said it used quotes from the websites of six auto insurers in 10 cities, including Tampa, for the minimum liability insurance required under state law.

In Tampa, for example, Progressive charged $1,110 annually for a married woman and $1,392 for a widow, the research showed. Farmers boosted the rate significantly from $2,224 to $2, 972, the consumer group found. Geico raised it from $2,042 to $2,166 and State Farm was unchanged at $1,320.

Spokeswomen for Geico and State Farm had no immediate response for this story, but insurers have argued consumers win when companies compete with differences in the way they price policies.

Because government requires people to carry car insurance, however, rates are regulated and there are running battles over when and how companies should have pricing flexibility and when they should not.

For example, six states including Florida have recently banned a practice called "price optimization." That's when companies charge some customers more not because of their driving record but because they are judged less likely to shop around for a new policy based on market research.

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