WASHINGTON, D.C. – Today, Congresswoman Rashida Tlaib (MI-12) and Congresswoman Rosa DeLauro (CT-03) introduced the Auto Insurance Expense Relief Act to support working families by including auto insurance expenses in the cost-of-living formula used to determine eligibility for federal assistance programs.

Currently, 49 of 50 states require drivers to have auto insurance, yet this cost is not factored into the formula for applying for federal assistance—even though the cost of gas and car insurance every month are significant expenses. As many residents already know, the cost of auto insurance has increased by an average of 26% in 2024 leaving many families in the cycle of poverty.

The Auto Insurance Expense Relief Act would help working families more accurately reflect their monthly expenses when applying for federal assistance programs by allowing auto insurance to be part of the calculation, which would increase the number of benefits working families receive.

“While rent, utilities, and other living expenses are deducted from a household’s income to enable more families to qualify for federal assistance, it’s outrageous that auto insurance is currently not considered as an expense. This legislation is needed to alleviate the financial strain on struggling families,” said Congresswoman Tlaib. “Detroiters still pay the highest auto insurance rates in the nation, and the average rates increased by 85% in the last year. This is about economic justice and ensuring that working families receive the support they need.”

“When Americans budget their expenses for the month, they always include their insurance costs – which is why it is absurd that auto insurance is currently not considered an expense when it comes to qualifying for federal assistance” said Congresswoman DeLauro. “I am proud to join Congresswoman Tlaib in introducing legislation that would ensure these costs are factored in when families apply for federal benefits so families receive the resources they need to put food on the table, pay their bills, and take care of their families.”

Tlaib has also introduced the Prohibit Auto Insurance Discrimination (PAID) Act to address auto insurance companies’ outrageous rates using “non-driving factors” such as education level, zip code, marital status, or credit score—that have nothing to do with how safe a driver you are.

This legislation is cosponsored by Representatives Jamaal Bowman (NY-16), Sheila Cherfilus-McCormick (FL-20), Yvette Clarke (NY-09), Bonnie Watson Coleman (NJ-12), Adriano Espaillat (NY-13), Maxwell Frost (FL-10), Jim McGovern (MA-02), Eleanor Holmes Norton (DC), Katie Porter (CA-47), Delia Ramirez (IL-03), and Shri Thanedar (MI-13).

This legislation is endorsed by Mothering Justice, People’s Policy Project, Center for Popular Democracy, Detroit Action, We the People Michigan, Wayne Metro Community Action Agency, and Michigan United.

“This bill safeguards a fairer assessment of an individual’s actual disposable income and resources. Since car insurance is a necessary expense, it makes sense not to count it against someone when determining their need for assistance,” said Danielle Atkinson, Executive Director of Mothering Justice. “Detroit, for example, is still the most expensive place to own a car in this country and the lowest income areas are unfairly targeted with higher rates which negatively affects individual and families’ financial well-being.”

“In most parts of the country, public transportation is not available so people must rely on cars to get to work making auto insurance a necessity,” said the consortium at UM Poverty Solutions. “This expense can eat up a substantial portion of a household budget for households with limited means. To illustrate, the current poverty line for an individual is $15,060, so in Florida, the state with the highest premiums, auto insurance costs about $2900 a year or about 19% of annual income. In the state with the lowest premiums, North Carolina, the annual cost of insurance is $1148 which is over 7% of annual income.”

“In most parts of the country, cars are necessary to get to work and insurance is necessary to drive a car,” said Matthew Bruenig, President of the Peoples Policy Project. “These kinds of basic and work-related expenses should be deducted from income in order to get a true understanding of what resources SNAP-eligible families have available to them.”

The full text of the bill is available here.

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