Published: June 2023

Groups say yes to legislation that would prohibit auto insurers from discriminating based on socioeconomic factors

Advocates, including Consumer Action, wrote a letter to members of the House Financial Services Committee expressing support for the Prohibit Auto Insurance Discrimination (PAID) Act (HR 3880), which would prevent auto insurance companies from using socioeconomic factors in their decision-making about customer insurability and rates.

Consumer Action and 18 other advocacy organizations wrote a letter to members of the House Financial Services Committee expressing support for the Prohibit Auto Insurance Discrimination (PAID) Act (HR 3880). The legislation would prevent auto insurance companies from using socioeconomic factors to determine consumers’ eligibility for auto insurance or as a basis for determining the premium they pay for coverage. Because virtually every state mandates the purchase of auto insurance, the PAID Act provides a necessary national baseline requirement that will help ensure that lower-income consumers and people of color are not disproportionately denied the opportunity to drive legally. Although states generally forbid the use of income and race as a rating factor, most states do not explicitly prevent the use of factors that strongly correlate with race, ethnicity or income—for example, credit reports/scores, education, employment, homeownership status, and home ZIP code. The Federal Trade Commission would be responsible for enforcing this law, and violations would be considered unfair and deceptive acts. 

Lead Organization

Consumer Federation of America

More Information

Click here to read the letter.

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