Tlaib, Watson Coleman, Takano Reintroduce Legislation to Prevent Discrimination in Car Insurance Rates Against Working Class Americans

DETROIT — Representatives Rashida Tlaib (MI-12), Bonnie Watson Coleman (NJ-12), and Mark Takano (CA-39) reintroduced a bill to ensure insurance companies use only driving-related factors in determining car insurance rates and eligibility. The Prohibit Auto Insurance Discrimination Act, or PAID Act – H.R.3664, would end the use of income, credit score, education levels, and other racial proxies unrelated to driving history and ability, preventing insurance companies from using these details to raise rates for low-income individuals, non-homeowners, and others who otherwise have good driving records.

“My residents still pay some of the highest auto insurance rates in the nation. Your education level, zip code, credit score, home ownership status, job, and marital status do not determine your driving ability,” said Congresswoman Rashida Tlaib. “Yet auto insurance companies use these predatory and discriminatory practices when determining rates. Auto insurance discrimination continues to keep our residents in the cycle of poverty. I am so grateful to partner with Congresswoman Bonnie Watson Coleman to reintroduce the PAID Act to put an end to this discrimination.”

“We have to start to acknowledge that we’ve allowed systems in this country to drain the earnings of those least able to afford it and least able to speak up for themselves. Car insurance practices are part of the problem. Car insurance is a necessity for most American families, and many of them are being charged far higher rates for unfair, undisclosed, and unproven reasons,” said Congresswoman Watson Coleman. “Factors like where you work or whether you have a college degree don’t weed out bad drivers — they just create a two-tier system where those who make less get charged more. Working families deserve better than a system that is fundamentally unfair. I’m proud to work with my colleagues Reps. Tlaib and Takano to introduce legislation like the PAID Act that levels a playing field that has been tilted against working families for far too long.”

“Your auto insurance rates should be based on how good your driving is—not unrelated factors,” said Congressman Mark Takano. “Auto insurance discrimination preys on communities already squeezed by the rising cost of living under Trump’s tariffs. People are searching for relief, and the PAID Act is one tangible way to help. I am proud to join Reps. Watson Coleman and Tlaib in reintroducing the PAID Act to put an end to this unfair practice and help lower rates for our drivers all over the country.”

Ever more frequently, insurance companies use so-called income proxies to set automotive insurance rates, despite a lack of evidence to indicate such factors identify risky drivers. Use of these proxies results in higher rates charged to lower-income drivers while more affluent drivers see savings, costing working families billions of dollars each year. The PAID Act would ban these practices by:

• Barring the use of the following characteristics for calculating rates or deciding eligibility:
  • Education;
  • Occupation;
  • Employment status;
  • Home ownership status;
  • Credit score, consumer report;
  • Gender;
  • Zip code or adjacent zip codes;
  • Census tract;
  • Marital status;
  • Previous insurer, or
  • Prior purchase of insurance.
• Empowering the Federal Trade Commission (FTC) to enforce these prohibitions, and set the necessary regulations to do so.

Every state except New Hampshire and Virginia requires drivers to maintain car insurance, making it essential for families that rely on a vehicle to get to work, pick up groceries, or drop their children off at school.

The bill in its entirety can be found here.