death of spouse Grief widow

Widow Penalty – Car Insurance

So a “widow penalty” is apparently a very real thing.  This article talks all about it.  I know taxes will get worse in a few years as well.  I wonder what else I won’t see coming.

But according to a new study by the Consumer Federation of America, a change in marital status from married to unmarried (through divorce or the death of a spouse) can cause a woman’s auto insurance premiums to rise as much as 226%—suggesting a “widow penalty” that CFA director of insurance Bob Hunter said in a press teleconference Monday with executive director Stephen Brobeck is “immoral and should be stopped at once.”

Using the stock profile of a 30-year-old female with a perfect driving record and holding all variables (from income to car model) constant except for marital status, the CFA study surveyed quotes from six auto insurance giants—State Farm, GEICO, Farmers, Progressive, Nationwide, and Liberty—across ten different U.S. cities. Of the six, State Farm was the only provider to never change its prices according to driver marital status; the remaining five routinely quoted higher prices to single—never married, divorced, or widowed—female drivers. Of those five, only Nationwide sometimes made exceptions for widows by not raising their rates. The “widow penalty” overall averaged to an approximately 14% increase.

1 comment on “Widow Penalty – Car Insurance

  1. Have you seen your lawyer to probate his estate yet, rewrite wills, rename mortgage, car titles, bank, investments, etc.? Anything in his name only will require probate and you will need Letters of Authority before you gain access usually. (Not sure of GA rules which you would know better. Some states have short filings for small estates and others require long processes.) Sometimes only death cert is needed. And you should see an accountant/tax adviser. Things to know: his estate, bills, and tax ends at time of death. From that moment on, it’s now the “estate of…”. His 1040, in his name and/or yours will be as it was in 2014 but it will be marked “deceased” and date deceased; and the 1041-if you need to file it-will be “Estate of…Deceased”. The 1041 you can claim refund for funeral expense on behalf of “estate of” if a policy from him paid for the funeral; and there may be other claims for reimbursements or credits to claim on the 1041 that may be to your advantage even if you don’t technically need to file a 1041 because the fed threshold to file is if his estate earned “income” in the millions of dollars ($10 m maybe?) But if you receive a 1099 in his name, that gets listed on the 1041 and the 1041 must be filed. A 1099 is considered income and must be claimed. A tax adviser can help you adjust your withholding to make sure you cover any additional tax liabilities for the rest of 2016 so that you aren’t caught short come 2017. I’ve been working on probating my father’s estate. He died in 9/15 and we are still processing probate. God bless and good luck!


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