October 22, 2021

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Woman’s car insurance premiums increase after she removes male co-driver

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“I said to her, ‘I don’t want an adjustment on my premium, I want you to look at the matrix you are using.'” Photo / 123rf.com

An Auckland woman was shocked to find removing her former partner from her car insurance policies increased her total premiums by hundreds of dollars.

After calling Tower Insurance for an explanation she says she was initially told a factor could be because women are considered higher risk.

However, the insurer has now apologised for “incorrect information”, and says removing the male driver should have actually reduced the annual cost of the policies.

The woman, who asked not to be named, has two separate policies with Tower, covering a car each. She used the insurer’s website to take her former partner off the policies as a driver, and the combined cost of the policies increased by hundreds of dollars a year.

Her former partner was on a restricted licence when added as a named driver, and she receives a no-claims bonus on both vehicles, so the adjustment couldn’t be because of her own driving history. She updated her address separately, and that didn’t change the premiums.

“The first person I spoke to [in customer service], he used words [to the effect] that it is calculated because women are considered higher risk.”

She asked to speak to somebody higher up, who told her gender was not a reason for the recalculation, but couldn’t give an explanation. They promised to look into it.

“I said to her, ‘I don’t want an adjustment on my premium, I want you to look at the matrix you are using to make these decisions.'”

Asked about the case, Emily Davies, head of corporate affairs at Tower, told the Herald on Sunday the online recalculation was an error.

“We have reached out to our customer and have apologised for providing incorrect information about her policy change.”

Davies said details of the policies couldn’t be discussed for privacy reasons. However, “while insurers use factors like age, licence type, gender and vehicle model to calculate an individual’s vehicle insurance premium, the change that you have described should have resulted in a slight reduction in premium for the customer, not a significant increase. We are looking into how this error occurred”.

Insurers calculated premiums based on statistical differences that could be proven to change the risk, she said.

“For example, our claims data shows that younger, male drivers are statistically more likely to have an accident, which means their premiums can be higher than older drivers.”

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