MAKING THINGS RIGHT: SB 1238 PROTECTS TEXAS WIDOWS

Losing a spouse is tough enough. Some insurance companies, however, see it as an opportunity to maximize their profits. Senate Bill 1238 by Sen. Lois Kolkhorst (R-Brenham) and Sen. Mayes Middleton (R-Galveston) will fix that.

Insurance companies, especially those covering cars, are known for offering discounts to married couples compared to single individuals. This is particularly true for young males under 25, who often face some of the highest insurance rates among all demographics. However, if that same male gets married, he experiences a significant reduction in his insurance rates. According to insurance agents, the reasoning is that as a married man, he is likely to demonstrate more maturity and, consequently, make better decisions. They are considered a lower risk based on the data, as claimed by insurance companies.

Insurance companies currently use “married” or “single” as classifications for individuals to better assess risk among policyholders. Unfortunately, some insurance companies rely solely on these two categories. Thus, when a widow informs her insurance company that her beloved partner has passed away, the company reclassifies her as “single.” As a result, she faces higher insurance rates due to this status change.

It’s not just limited to auto insurance. A widow can see the same thing happen with health, home, and life insurance. While increases can happen to both men and women, according to testimony in recent legislative hearings, widowed female premiums are 12-13 percent higher than widowed male premiums.

“Really, this is about legislatively mandating common sense and decency,” said TCA President Sandra Haverlah. “You can’t ever convince me that a 70-year-old woman who lost her husband of 45 years is a greater risk for driving, health, or life insurance simply because her husband died. And she’s certainly not a 12 percent higher risk than a man who just lost his wife.”

More importantly, Haverlah said, “what kind of company profits off the death of a spouse?

It’s a shame this kind of thing needs legislation, but apparently it does.”

During recent testimony at the Texas Senate Business and Commerce Committee, lawmakers learned that while some insurance companies categorize individuals as married, single, or widowed, not all do. Additionally, those that lack a widowed category typically impose a surcharge for the loss of a spouse. In contrast, those with a widowed category do not experience a significant increase in rates.

This becomes even more critical as the widow may also lose some income streams as a result of the spouse’s death, such as pensions or social security. Every dollar counts.

SB 1238 deserves the strong support of the TCA community and should be quickly enacted into law.