Insurers Accused of Charging Bereaved Customers Higher Premiums

In the past few months, many bereaved customers have reported significant increases in their home and car insurance renewal quotes after the death of a partner. According to the article, shortly after her husband's passing, Kay Lawley's car insurance quote went up from £301 to £348, while her home and contents policy rose by almost 12% - from £1,039 to £1,161.

When Lawley inquired about the reason for the increases, the insurer Ageas was unable to provide any explanation beyond "that's what comes up on the screen." The article states that this practice of charging a "bereavement premium" is based on insurers' belief that single policyholders are higher risk, even if the customer's circumstances have not changed.

Divorced and separated couples are also affected by this pricing model, which relies on algorithms that match individuals to the claims history of similar customers. Factors like age, profession, and marital status can influence the pricing, but this approach has been widely criticized as insensitive, especially for those adjusting to the loss of a partner.

The article highlights the lack of transparency in insurers' pricing practices, with the increasing use of AI-driven models making the process even more opaque. Industry groups and consumer advocates are calling for more regulation and oversight to ensure fairness and empathy in how insurers calculate premiums, particularly for vulnerable customers.