Progressive Seeks to Raise Auto Insurance Rates Based Solely on Age
Progressive Corp. wants to increase auto insurance premiums for Maine drivers older than 65. The Maine Bureau of Insurance initially rejected the request, but this month decided to reopen proceedings.
Progressive initially made the request about a year ago, and in June, Maine’s Bureau of Insurance rejected it. Waterville state Rep. Henry Beck, the co-chair of the Legislature’s Insurance and Financial Services Committee, says Maine law is clear.
“That no insurance company shall cancel, reduce liability limits, refuse to renew, or increase the premium of any automobile insurance policy of any kind whatsoever, solely based on age,” he says.
But the state document that details the bureau’s decision also includes a footnote that says state law does not prohibit all types of age rating. For example, it’s common practice to set higher premiums for young drivers, so that the premium decreases with age.
Progressive asked the Bureau of Insurance to reopen its request based on that footnote. Earlier this month, the Bureau granted that request.
“We were really surprised to hear about the proposal just targeting people based solely on their age,” says Lori Parham, the state director for AARP Maine. “Compared to other drivers, seniors as a group are less likely to speed. They’re less likely to drive after drinking. And they’re more likely to buckle their seat belts. They’re some of the safest drivers on the road.”
And Katherine Freund, executive director for ITN America in Westbrook, which provides transportation for seniors, says as measured by vehicle damage alone, older drivers are often considered lower risk because they tend to keep their cars in garages and live in suburban areas where vehicles are less likely to be vandalized or stolen. As for crashes, however…
“Crashes for older people tend to begin going up at about the age of 75, not 65,” she says. “And by the time people reach the age of 85, they reach a very high risk area.”
Freund points out that there can be many reasons an insurance company may request a premium rate hike.
Progressive did not respond to requests for comment for this story. Loretta Worters of the Insurance Information Institute says she hasn’t heard of similar proposals by insurance companies in other states.
“They may find that in a particular state that they’re finding more elderly drivers are involved in more accidents,” she says.
According to Maine Department of Transportation data from 2009-2013, older teenage drivers have the highest crash rates. That rate dips to its lowest when people are in their early sixties. By age 70, the crash rate ticks up again, and to a rate similar to drivers in their late twenties.
In an email, a spokesman for the Maine Bureau of Insurance said that a meeting on Progressive’s request is scheduled for Aug. 16. But Beck says he thinks Maine law is clear.
“If more clarification is needed, I think you’d see a lot of support in the Maine Legislature.”
If the rate hike is approved, it could affect more than 65,000 policyholders.