Texas Gov. Greg Abbott has signed a bill that will prevent insurance companies from raising the auto and home insurance rates of people just because their spouses have died. The measure to end the so-called "widow penalty" will take effect Sept. 1.
Senate Bill 1238 was primarily the work of two Houston-area lawmakers, state Sens. Lois Kolkhorst (R-Brenham) and Mayes Middleton (R-Galveston). The bill passed the House in an amended form earlier this month that the Senate swiftly confirmed. Abbott signed it into law last week.
The law to end the "widow penalty" has been at least a decade in the making. A 2015 study by the Consumer Federation of America found that four of the six major auto insurance providers – specifically GEICO, Farmers, Progressive and Liberty – routinely reclassified widows and widowers from "married" to "single" after their spouses died, then raised their rates by an average of 20%.
Evelyn Delgado of New Braunfels gave testimony in favor of the bill before the Senate Committee on Business and Commerce in March. After she lost her husband to kidney disease last year, she notified her insurer in order to have them take her late husband off her policy.
"I was expecting that they were going to tell me that my rate was going down because my husband had passed away, and I was really shocked when they said that my rate was going up," Delgado told Houston Public Media. "But they said, because now I was no longer classified as married, now I was classified as single, that that’s how the rates are decided."
Delgado connected with the nonprofit Texas Appleseed, which had begun investigating fairness in insurance pricing. She learned she was far from the only widow who'd had such a shock.
Delgado said she was fortunate, because she could afford to pay the extra $280 per year her insurer was charging her.
"But there are so many widows and widowers out there that are ... on very fixed income, relying on both incomes ... maybe both Social Security (checks) to make it month to month," Delgado said.
Ann Baddour, director of the Fair Financial Services Project at Texas Appleseed, said it's difficult to estimate how many Texans suffer under the widow penalty, because not all insurers make use of it.
"But what we do know is that there are over 1.1 million widows in Texas, and that's a lot of people who could potentially be impacted," Baddour said. "Seventy-six percent of widows tend to be women, and in our earlier studies, we found that women, especially middle-aged women, are particularly harmed by some of the insurance penalties based on things like gender and marital status."
Baddour encouraged anyone who thinks they may have been hurt by the widow penalty to contact their insurer as soon as possible after the new law goes into effect.
"It’s important for people, when they renew their policies after September 1, 2025, to ensure that, for rating perspective, they’re categorized as married if they were categorized as single or something else,” Baddour said. “We’re hopeful that that change will lead to lower premiums."