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Gursten tells WXYZ: Women pay more for auto insurance

September 10, 2018 by Steven M. Gursten

Attorney Steve Gursten tells WXYZ: discrimination against women, widows, by MI auto insurance companies violates the law; Lana Theis should resign in shame

Fact: Women and widowed drivers pay more for auto insurance than men. Women are being discriminated against by Michigan’s powerful auto insurance companies.

Fact: The Insurance Commissioner is allowing the insurance industry use a ridiculous and transparent concocted excuse to charge women more than men.

Fact: Powerful politicians, including House Insurance Committee Chair Lana Theis (R-Brighton) are not only doing nothing about it, but she and her husband are cashing in on tens of thousands of dollars in campaign contributions by Michigan’s auto insurance companies to allow them to continue to charge women drivers more than men.

Fact: All of this clearly violates Michigan law that expressly prohibits insurance companies from charging women more than men. It also violates common sense, as women are statistically safer drivers.

It’s also not the least bit surprising. Insurance companies in Michigan are seldom – if ever – held to the letter of the law when it comes to their mistreatment of consumers and car accident injury victims. Why should these same insurance companies be held to the letter of the law when it comes to price discrimination and treating women and widows differently from men as well?

WXYZ Channel 7’s Kim Russell exposes illegal practice of charging women more for car insurance 

Thankfully, WXYZ Channel 7’s Kim Russell last week exposed this practice in her investigative story, “Michigan allows higher car insurance prices for women”:

“[T]he Insurance Code of 1956 … says that we cannot be discriminated against when it comes to insurance prices based on gender or marital status. But one woman found out in the most heart-breaking of ways that’s exactly what’s happening.”

AAA charges Michigan Auto Law legal assistant more – because she’s a widow

That one woman that Kim Russell is talking about above is Michigan Auto Law’s very own Melinda McKee.

As Ms. Russell explained, tragedy struck Mel’s family when her husband passed away in January 2018.

When Melinda told her family’s auto insurer – AAA – that she was cancelling the policy for her husband’s car following his untimely passing away, she received shocking news: her auto insurance rates were being raised.

Because she was now a widow, AAA had placed her in a so-called “higher risk bracket,” despite the fact that she continued to have a perfect driving record.

As result, Melinda went from paying $200 per month for two vehicles to $300 per month for one vehicle!

But what AAA did to Melinda following the tragic passing of her husband is also happening to tens of thousands of other women in this state. As Kim Russell reported, what Melinda had experienced was all too common in this state – despite a law that is meant to prevent exactly this type of gender discrimination from happening.

I was also interviewed in the story. Here’s what I told Kim Russell in the WXYZ story:

“It is not legal … There is a law right on point that says women cannot be charged more than men, nor should they by the way, because statistically women are safer drivers.”

Stop women from being discriminated against and paying more than men for auto insurance

Although this is a very serious problem in Michigan that is affecting thousands of women, the solution is neither complicated nor new.

The Insurance Commissioner just has to enforce the long-standing, existing law barring auto insurers from charging higher prices to women and widows.

Assuming the insurance commissioner – who is a political appointee, after all, continues to refuse to enforce both the plain wording and the spirit of the law by allowing insurance companies to concoct transparent loopholes that allow insurance companies to charge women more – then it is up to lawmakers to take action – by enacting House Bill 5111 – to strengthen the law and stop discrimination against women and widows.

At the end of the day, this practice will only stop when violations result in swift, certain and severe penalties for insurers.

And that won’t happen until lawmakers like Lana Theis stop caring more about protecting insurance companies who deliberately break the law than they do with protecting their own constituents.

Do women pay more for car insurance?

In her WXYZ story, Kim Russell reported that rates obtained from Esurance and Progressive showed there was a 28% “penalty for being a woman” with Esurance (i.e., the rate for the same policy was 28% higher for a woman than a man) and there was an 18% “female penalty” with Progressive.

Michigan law already bans auto insurance price discrimination against women and widows

 That women and widowed drivers are being charged more for car insurance is impossible to understand in light of how clearly Michigan law prohibits such an inequitable practice:

“An insurer shall not establish or maintain rates or rating classifications for automobile insurance based on sex or marital status.” (MCL 500.2111(4))

Women are safer drivers than men

Charging women and widows more for car insurance than what men are charged is as illogical as it is illegal, precisely for the reason I told WXYZ’s Kim Russell:

“ … because statistically women are safer drivers.”

The proof is in the following crash statistics which demonstrate that “[m]ore male drivers were involved in crashes [and fatal crashes] than female drivers …”:

  • 2017: 276,112 male drivers were involved in crashes and 1,030 were involved in fatal crashes, whereas 221,365 female drivers were involved in crashes and 446 were involved in fatal crashes.
  • 2016: 275,382 male drivers were involved in crashes and 1,059 were involved in fatal crashes, whereas 221,200 female drivers were involved in crashes and 445 were involved in fatal crashes.
  • 2015: 260,508 male drivers were involved in crashes and 1,043 were involved in fatal crashes, whereas 209,843 female drivers were involved in crashes and 380 were involved in fatal crashes.
  • 2014: 262,359 male drivers were involved in crashes and 893 were involved in fatal crashes, whereas 208,359 female drivers were involved in crashes and 315 were involved in fatal crashes.

(Source: Michigan Traffic Crash Facts, “Fact Sheets” (“General Facts”), 2017-2014)

Insurance Commissioner doesn’t enforce the law to stop insurance companies from engaging in auto insurance gender discrimination

There is blame to go around. Representative Lana Theis is a particularly odious example of the corrupting influence of money in politics. But when, as here, there is already an existing law that is meant to stop exactly this type of price discrimination from happening, then the lion’s share of the blame lies squarely with our Michigan Insurance Commissioner, Patrick McPharlin. McPharlin has served as Michigan insurance commissioner since he was appointed to the position by Governor Rick Snyder (R) in 2015

Patrick McPharlin has the power and the responsibility to review and approve – or disapprove – all rates submitted by Michigan auto insurers. That power includes the power to stop transparent games meant to skirt around existing laws to charge women more than men for car insurance.

And the Insurance Code gives him ample authority for rejecting rates that discriminate against women and widows:

  • “All rates for automobile insurance … shall not be … unfairly discriminatory.” (MCL 500.2109(1)(a))
  • “An insurer shall not establish or maintain rates or rating classifications for automobile insurance based on sex or marital status.” (MCL 500.2111(4))

Rather than rationalizing away the injustice of insurers’ discrimination against women, as the Insurance Commissioner’s public information officer did during her interview with Kim Russell, the Insurance Commissioner should have used this as an opportunity to finally stand up for women by vowing to enforce these laws for their protection.

Lana Theis  – who also happens to be a woman – won’t stand up for car insurance gender equality 

It’s ironic – not to mention tragic – that the politician who’s most standing in the way of strengthening Michigan’s Insurance laws to protect women and widows from discriminatory pricing is a woman.

Rep. Lana Theis (R-Brighton) holds the powerful position of being Chair of the House Insurance Committee.  She has for nearly two years wielded that power to prevent attempts to single-handedly stop price discrimination.

And she and her husband have both been paid handsomely for it by the state’s powerful insurance industry.

In October 2017, Rep. Sherry Gay-Dagnogo (D-Detroit) introduced House Bill 5111, which proposed to bar auto insurers from discriminating and charging more to consumers because they were women and/or widowed:

“An insurer shall not use … sex … [and/or] marital status … [as a factor] in underwriting or establishing rates for automobile insurance …”

Despite the bill’s widespread support of 30 co-sponsors (quite a stark contrast to House Bill 5013, Theis’s failed No-Fault bill, which had zero co-sponsors and which was essentially written by the insurance industry), Theis has steadfastly ignored the bill to protect women, refusing to call it up for a hearing – which is the necessary precursor to the bill receiving a vote by the full House.

When WXYZ’s Kim  Russell asked to interview Rep. Theis, the politician refused, according to Russell’s follow-up story, “Is lawmaker blocking bills to stop gender discrimination by auto insurers?,” dispatching her chief of staff to provide a statement that – not surprisingly – failed to answer Ms. Russell’s principal inquiry:

“The statement did not explain why she is not using legislation to stop gender discrimination and discrimination based on marital status, which the state’s insurance commissioner’s office says lawmakers could easily do.”

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