‘Bereavement penalty’: people who lost partners hit by insurance premium rises | Insurance

S.Shortly after her husband’s death, Kay Lawley* received renewal quotes from Ageas, the couple’s home and car insurance provider. He told the company he was dead and was stunned to see quotes rise by as much as 15%.

Car insurance quote increased from £301 to £348, while home and contents policy increased by almost 12% from £1,039 to £1,161.

“When I asked why, Ageas couldn’t give me any reason other than ‘this is what’s on the screen,’” he says.

“I was already the lead on both policies and nothing else had changed. How can such decisions be made at a time when the surviving partner is not available to discuss the draw and at the same time the household income is likely to fall?”

Newly bereaved customers face paying a premium for their grief, while analysts say many insurance companies view a single policyholder as a higher risk.

Divorced and separated couples are also affected by this.

The little-known policy is based on algorithms that match individuals with the claims history of customers with similar profiles. Age, occupation and marital status can affect pricing, but this death penalty has been condemned as particularly insensitive by customers trying to adjust to the loss of a partner.

Alison Roper* was informed that home and buildings insurance would cost more when her husband died.

“They explain that even if you have two large dogs, as in my case, your property will likely be left less well-maintained when you are just one person,” she says. “As for car insurance, my husband’s name wasn’t on the policy because he couldn’t drive anymore, but the price went up anyway.”

Another recent widow contacted the Guardian after her renewal fee rose by nearly £440 after her husband died.

“The house and contents policy with Swinton Insurance was in both their names, but the real policyholder was the father,” says his son Steve Elliott*. “The renewal quote was just over £200, but when Swinton heard her father had died it became £641. I explained that nothing else had changed and that my mother had been charged £441 more because she had lost her husband. They blamed the system and said they could do nothing about it.”

The family then accepted an offer of £229 from another insurance company.

According to the Association of British Insurers, providers are free to make commercial decisions about the prices they offer based on their risk appetite, and any changes in personal circumstances may affect this. He declined to answer why a driver with no history of damage is considered riskier when living alone or how common the death bonus is.

When contacted by the Guardian, Swinton apologized for the inconvenience and said she would offer compensation. “Our agency should have escalated the matter to our insurance team for further investigation,” a spokesman said. “We address this with the team to ensure learning and improvement.”

Ageas says joint policyholders are statistically less risky than single policyholders and therefore receive discounts. This right is lost when one of them dies.

“We understand that the removal of this discount may cause additional hardship for bereaved customers who have lost a partner or spouse since their last renewal,” says chief insurance officer Thomas Quirke. “To prevent this, we have a specific process to ensure that the joint policyholder discount is not removed when the policy comes up for renewal.”

Ageas acknowledged that the process had failed in the Lawley case. He returned the additional premiums he had collected and sent her a bouquet of flowers. However, they will lose the discount when their policy is next renewed “to reflect the true risk of having a single policy for both car and home insurance.”

She says: “I’m discovering that little has changed in the past 30 years and that being a single person still comes at a premium, whether it’s insurance costs or travel deals. I had hoped the world might have moved on from the duality bias, but it certainly hasn’t.”

Fairer Finance He says insurers’ opaque pricing practices are undermining public trust, and the growing reliance on artificial intelligence to calculate premiums is making matters worse. The campaign group wants the government and regulators to insist on greater transparency.

“These cases highlight the lack of humanity inherent in many insurers’ pricing algorithms,” says chief executive James Daley. “Even if these decisions have a statistical basis, they lack precision; worse, insurers cannot explain their reasoning to customers because their pricing models are considered trade secrets.

“Current pricing practices are undermining consumer confidence and the use of AI means complexity is accelerating.”

* nouns changed