Several Colorado residents have recently uncovered significant errors in their car insurance policies, with insurance companies incorrectly billing them for “hidden drivers.” These mistakes have led to unexpected premium increases, highlighting potential flaws in the insurance industry’s process for identifying additional drivers.
Christine O’Connor’s Insurance Surprise
Christine O’Connor, a 51-year-old single woman from Castle Rock, was caught off guard when Progressive insurance notified her in 2023 that her auto premiums would rise by over $2,000 annually. The reason? The company claimed that another driver needed to be added to her policy. However, O’Connor was puzzled as she had never added anyone to her policy.
Upon contacting Progressive, O’Connor discovered that the company had mistakenly added a woman who once lived at her address years ago—someone who had never driven her car, a 2015 Kia. The woman, who was the granddaughter of O’Connor’s landlord, had no connection to O’Connor beyond sharing an old address. Fortunately, Progressive reversed the charges the next day.
David Brockway’s Case of a “Newly Licensed” Driver
David Brockway, a resident of Granby, had a similar experience in November when Progressive notified him via email that his daughter, who was allegedly a newly licensed driver, would be automatically added to his policy. The issue? His daughter had moved to Alaska months earlier, where she had her own car and insurance. Brockway, who said his daughter was 21 and not newly licensed, was able to catch the error and contact Progressive before the company added her to his policy.
Insurance Industry’s Efforts to Find “Hidden Drivers”
O’Connor and Brockway’s cases are part of a broader trend in Colorado, where insurance companies are actively searching for “hidden drivers” who may be contributing to lost premiums. The industry has identified a phenomenon called “premium leakage,” where drivers fail to report additional individuals in their households who may be driving their vehicles. This leads to billions in lost revenue annually.
Insurance companies typically use third-party firms to mine DMV databases and other public records to identify undisclosed drivers. However, this process—known as “additional driver discovery” (A.D.D.)—can sometimes result in incorrect or outdated information, as seen in these cases.
Faulty Data Causes Frustration for Consumers
According to Steve Hakes, a Colorado-based insurance broker, insurance companies often rely on historical data to identify potential drivers, but this information can be inaccurate. He recounted an instance where a couple’s insurance company mistakenly added their 2-year-old daughter to their policy, despite the child not being able to drive.
For many consumers, these errors lead to increased premiums and frustration as they are forced to challenge incorrect data. Hakes emphasized that this puts the burden on customers to correct the insurance company’s mistakes.
Progressive Responds, but Consumers Still Bear the Burden
Ron Davis, a spokesperson for Progressive, declined to comment on the specific errors but provided a statement explaining that the company regularly reviews third-party information to verify household drivers. He noted that when discrepancies are found, the company reaches out to policyholders for confirmation. However, Davis did not address why these mistakes are not caught sooner or why customers are required to prove the data is incorrect.
For Brockway, the experience left him feeling frustrated. “It put the responsibility on me to deal with something they were doing,” he said, urging Progressive to improve their data checks.
Conclusion: A Growing Issue for Consumers and Insurance Companies
The issue of incorrect billing due to hidden drivers is becoming more common in Colorado. With the insurance industry facing pressure to find additional drivers to increase premiums, consumers are left dealing with the consequences of inaccurate data. As these cases show, it is crucial for insurance companies to thoroughly review their information and avoid burdening customers with errors that can significantly affect their financial well-being.
Source: CBS News
