Category Legal Affairs

“Widow’s penalty” prohibited in US state

06 October 2015 Norton Rose Fulbright

Pennsylvania motor insurers included in their policies a so-called “widow’s penalty” under which a widow or widower is charged a higher rate after the death of the spouse solely based on the change of her or his marital status.

Motor insurers produced statistics to the effect that single drivers incur higher claims costs on average than married drivers. In the absence of statistics that this applies to widows and widowers, the regulator refused to allow them to be included in the single driver category resulting in premium increases.

Pennsylvania has more than 200 companies providing motor cover and the regulator suggested that motorists shop around for a better deal if faced with this type of condition.

Thanks to GantDaily for this information.

First published by Financial Institutions Legal Snapshot.

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