Michigan Allows Car Insurance Rate Hike for Female Drivers?

If you live in the state of Michigan, then you must purchase auto insurance if you plan on driving. Since it is a requirement by law, you would assume that the insurance companies don’t discriminate against you based on your job, status, gender, education, or relationship. Unfortunately, you would be wrong, as new state auto insurance laws demonstrate.

A recent news investigation discovered that the state is cracking down on the way it lets insurers charge based on certain conditions. Here’s a recent example: Melinda McKee just lost her husband to lung cancer. When he passed away, she called her auto insurance company to verify that the insurance on his leased car was cancelled. But instead of cancelling it, the insurance company said she is now in a higher risk bracket because she was a widow. Melinda has a perfect driving record, yet her insurance still shot up from $200 for 2 vehicles to almost $400 for a single insured automobile.

Women are Safer Drivers than Men

For Melinda, this is beyond unfair. A recent Michigan lawmaker states that this type of discrimination is just downright not legal. There is already a law in place that explicitly states that women cannot be charged more than men for auto insurance. Nor should they, because on average, women are safer drivers. According to Young America Insurance women get in far fewer accidents and get charged with less DUIs than men.

Melinda McKee has worked at Michigan Auto Law for years and is appalled by the blatant discrimination. This investigation went further to determine how someone’s gender or marital status can directly affect their auto insurance rates. Two major insurance companies who provide quotes online were asked to give fair and balanced quotes. Using this method, the investigators were able to manipulate the application to determine if gender directly affects rates. They changed one of the applications to show a female gender, and they also changed one to reflect a widowed, single, or divorced marital status. Here are the results.

Why do Michigan Insurance Companies Charge More for Female Drivers?

Let’s start with Allstate. When the application was submitted as a single woman, the Esurance quote from Allstate came out to just shy of $300 per month. When this same application changed to a male driver, the insurance automatically dropped to $230 for the same exact policy. Apparently, the fine for being a woman is over 28%. This is serious discrimination and for now it's totally legal.

In all cases of investigative research, it was found that married men had to pay more for insurance than single men, whereas single women had to pay more than married women. What does this say about the way auto insurers view society? After concluding this telling research, the investigators then went to the Insurance Alliance of Michigan. They blatantly stated that they are aware that the state raises rates for women and sees this as a reasonable practice in Michigan. Many women don't agree with this assessment.

Women Drivers in Michigan are Angry

There is a lot of room for recourse, since the department can easily fine them or pull their license. The Insurance Alliance of Michigan was determined to set things right and see what course of action could be taken. The next step was to go to the office of the state insurance commissioner himself, Patrick McPharlin. Unfortunately, he was not available in his office at the time. But they were able to visit with Andrea Miller, who is Patrick’s public information officer.

Andrea made it clear that gender discrimination is allowed in pricing. Andrea went on to explain that it is completely legal when it comes to selling group insurance policies. Upon further research, it turns out that this isn’t untrue. There actually is a law that allows groups like the AARP offer insurance policies that aren’t regulated by the state in order to save members money. Insurance companies are smart enough to determine that if they can file paperwork as a group, they can get around these legalities and regulations.

Miller stated again that they are all following the law. So... what do insurance companies have to say about this ordeal? The investigators went back to AAA, who stated again that there are systems and policies in place that are meant to prevent discrimination on gender or marital status in car insurance pricing. The company then said that they would work on this issue. They reached out to Melinda McKee directly.

They contacted the agent who sold her that policy, which had gone up in price. AAA emailed that agent directly and stated that if a rate suddenly changes due to a spousal death, the agent can put in a request to keep the original lower rate. AAA finds it very unethical that someone should be slapped with higher rates because they lost their spouse. Other companies such as Esurance, Progressive, and Allstate did not confirm nor deny that they change their rates based on marital status or gender.

Progressive doubled up on this by releasing a statement that says they work to provide all consumers with fair and accurate quotes. They also look at multiple factors and conditions to determine rate and prevent risk. Esurance also released a similar quote promising that the insurance industry in Michigan is highly regulated and that they are in compliance with their state’s laws. What do you think? Should Michigan women be charged more for men solely on their gender?