State Regulation

Newly Signed Montana Law Will Raise Auto Insurance Rates for Women, Unmarried Drivers, and Widows

New Research by CFA Finds Insurance Penalties for Women in Dakotas, Idaho; Same Rules Now Apply to Montanans

Washington, D.C. –The Consumer Federation of America (CFA) said that a new Montana law signed Monday by Governor Greg Gianforte allowing discrimination in insurance markets based on a consumer’s sex or marital status will lead to higher auto insurance premiums for women and widows as well as other unmarried drivers. The bill, HB 379, was recently passed by the Montana legislature. CFA called the law a substantial step backward for Montana, which was one of seven states that prohibited sex-based discrimination in insurance pricing.

“Since 1985, Montana has banned the use of sex in all lines of insurance and, over the last several years as insurers started penalizing female drivers around the country, this law has kept insurance rates fairer for women in Montana,” said Michael DeLong, Research and Advocacy Associate at CFA. “This is an unnecessary giveaway to insurance companies that will punish women, single drivers, and widows, even if they have perfect driving records.”

CFA’s research on auto insurance premiums in neighboring states shows that, contrary to popular stereotypes, women pay more for auto insurance than men. In most states where sex is allowed in setting insurance rates, women pay more than men for the same coverage, and this is especially true for women who are 35 and older. For example, in Idaho, 35-year-old men pay an average annual auto insurance premium of $478 for basic coverage, but 35-year-old women pay an average annual premium of $488. Similarly, in South Dakota men pay an average annual premium of $415, but women pay an average premium of $429. And in North Dakota, men pay an average annual premium of $551, but women pay an average of $603—a $52 or 9% increase.

Auto insurers also use marital status to overcharge safe but unmarried drivers, even penalizing widows. In a 2015 study CFA found that several of the largest insurers—Farmers, GEICO, Liberty, and Progressive—increased premiums charged to women by an average of 20% after their husbands died. Liberty’s widow penalty was 8%, Progressive’s was 19%, Farmers’s was 22%, and GEICO charged safe drivers 29% more after their spouse passed away. Montana’s new law opens the door to price hikes on widows and drivers who are single or divorced.

“Drivers’ premiums should be based on their driving and accident history, not their sex or whether they are married,” said DeLong. “Unfortunately, despite Commissioner Downing’s argument in support of the new law, Montana women and unmarried drivers need to prepare for likely rate hikes. As insurance companies file rates under this new law, the Commissioner should hold public hearings to ensure that insurers do not unfairly jack up rates on women and unmarried drivers as they have done in other states.”

Contact: Michael DeLong, 925-708-1135