Bernie Wasserman and his wife recently gave themselves the ultimate gift for their golden years: matching cars.
When their insurance provider finalized the policies on their new Infiniti QX50 sport SUVs, which were identical apart from colour, the paperwork didn’t add up.
The Vaughan couple requested exactly the same coverage.
Both had flawless driving records, lived in the same home and were just a year apart in age — still in their 60s. So why did TD’s quote have Wasserman paying $649 more?
“We had them check three times to ensure the data was entered correctly,” Wasserman says.
It was.
The Problem: A ‘man’ tax in his golden years
Wasserman, a retired engineer, long suspected that auto insurers discriminated based on gender, but had no proof. Other factors could explain the price gap, he figured.
“This is the first time it’s really been obvious,” he says.
A TD manager acknowledged the disparity, Wasserman told me, but said their hands were tied because “that’s what the system spits out,” and noted, “men have a higher statistical rate of accidents,” in the area.
While Wasserman knows actuaries and algorithms determine risk, which drives pricing, the numbers seemed flawed and, well … unCanadian.
“I haven’t had an accident in 50 years since I’ve been driving,” he says. “I don’t have any speeding tickets or anything. Maybe a parking ticket here or there. Quite honestly, other than driving a few kilometres to the mall to go for my walk every day, and maybe 10 kilometres to meet my son for breakfast once a week, that’s about it. It makes absolutely no sense. Here’s a downright, right in your face, gender discrimination that obviously is sanctioned.”
Wasserman’s insurance quote confirms that in 53 years of driving, he has not filed a single claim. He escalated his concerns to TD’s ombudsman, which said it would let him know if his complaint had merit.
The Star Steps In: Ontario’s legacy of ‘reasonable’ discrimination
For context, we need to hit the rewind button to 1983, when a young man from Etobicoke named Michael Bates, 21, filed a complaint against Zurich Insurance with Ontario’s Human Rights Commission because he was being charged significantly higher premiums for car insurance than young women with the same driving record.
The commission’s board of inquiry sided with Bates.
The case wound its way through the legal system for the next decade until it reached the Supreme Court of Canada, where Bates’ interest was represented by Ontario’s Human Rights Commission.
In 1992, Justice John Sopinka wrote the majority opinion on the landmark decision that sided with Zurich.
Sopinka explained that while the industry practice was discriminatory, it was “reasonable” because no other practical method existed to categorize risk accurately. Data showed men ages 18-25 were substantially more likely be in an accident.
Sopinka warned that once better, non-discriminatory data became available, the legal “reasonableness” of using gender and age would vanish.
While other provinces have forced auto insurance providers to ditch gender in setting rates, Ontario remains one of the few holdouts, along with Alberta.
I invited Ontario’s Human Rights Commissioner to talk about the issue with me for this column. Had the office received additional complaints about gender discrimination in the insurance industry since Bates? Has it heard from others like Wasserman who are concerned that pricing discrimination may follow men into their golden years?
“Unfortunately, the Commission has not done any recent substantive work in this area that would be of assistance,” a spokesperson wrote me in an email.
The Canadian Institute of Actuaries gave me access to two actuaries who work for different auto insurers over a video call.
Both found it difficult to believe that higher premiums would follow men into retirement. When I asked if Bernie’s red seats might have triggered a higher rate, they laughed and dispelled the notion of a ‘colour premium’ as an “urban myth.”
“Companies are always looking to make sure their rates are as accurate and as competitive as possible,” said Shayan Sen.
If a company decided to be cautious and charge male drivers a higher rate even they’re older, Sen noted, “it would be hard for them to compete.”
But Andrew Paulley, a Toronto economist who recently released a study on age and gender discrimination in the auto insurance industry, says more than 5,000 data points he analyzed reveals some companies have no interest in doing business with certain types of drivers.
“I found the premium difference by gender does collapse as people get older,” Paulley said in a phone call, “but the insurance rate that you pay isn’t always an actuarially fair rate.”
Paulley’s study used insurance data from Alberta, which is publicly available, to assess pricing trends across the province from dozens of insurance brands, which are owned by seven parents companies, most of which operate in Ontario.
“There are some companies that charge more for men than they charge for women and the difference is larger than average,” Paulley says. “So really, you could get 20 quotes, and the gap between the lowest and the highest for the exact same amount of insurance for this one male driver that you’re speaking of, could be upwards of $2,000.”
The market, Paulley said, in reality is nowhere near as competitive as it should be.
Insurance quotes Paulley obtained for the rating profile of a senior male with a clean driving record revealed that three of seven firms — 32 per cent of Alberta’s market share — charged older men significantly above the industry average.
Regulators should be catching these anti-competitive strategies, but they’re not, Paulley says.
The role of the Financial Services Regulatory Authority of Ontario (FSRA) “is to review insurers’ rate and risk classification filings to ensure they are supported by data and comply with all legal requirements,” a spokesperson wrote in an email.
Section 22 of the Ontario Human Rights Code, they noted, allows insurers “to use certain factors, like age, sex/gender, and marital status, when determining premiums paid by consumers, provided the use of those factors is supported by actuarial evidence and meet all legal requirements.”
Since government oversight of the insurance industry began in 1988, “only one rate change application (out of more than 2,500) has ever been denied” by FSRA, Paulley states in an separate 2022 study of Ontario’s insurance system not yet published.
Consumers concerned about premiums, the regulator told me, should “speak directly with their insurer to explain the specific factors that apply to an individual policy.”
So what’s TD position?
“TD Insurance works to ensure clients have coverage that reflects their individual needs,” spokesperson Abby Fong wrote in an email. “Across the industry, auto insurance premiums are calculated using a range of factors and vary by policyholder.”
Fong added: “We are in contact with our client to support them and address their inquiry.”
The Resolution: Shopping for fairness
Wasserman confirms he’s not yet heard back from TD’s ombudsman or anyone else at the company.
Paulley shared with me the names of three additional companies that might provide a more competitive quote based on his Alberta study.
Worth a shot, Wasserman said.
I’ll keep you posted.
