Bill could bar Michigan auto insurers from using non-driving factors

Bill could bar Michigan auto insurers from using non-driving factors | Insurance Business

Bill could bar Michigan auto insurers from using non-driving factors

Just weeks after Michigan Governor Gretchen Whitmer signed a landmark no-fault auto insurance reform bill, legislators are demanding for more to be done to reduce the state’s extortionate auto insurance rates.

US Rep. Rashida Tlaib has introduced a bill called the Prohibit Auto Insurance Discrimination Act (PAID), which would prevent auto insurance companies from using non-driving factors like zip code, census tract, gender, education, occupation, employment, homeownership, credit score, and marital status, to determine rates.

According to a report in the Detroit Metro Times, Tlaib brought PAID to the table alongside Rep. Bonnie Watson Coleman, D-N.J., because she believes the bill recently signed into law by Governor Gretchen Whitmer “does not go far enough to stop these harmful practices” of using non-driving factors.

“Auto insurance rates should be determined by your driving record, not your credit score, gender, marital status, education, residence, or any other non-driving factor that has nothing to do with your safety on the roads,” Tlaib commented. “Drivers in Michigan’s 13th congressional district face some of the highest car insurance rates in the nation, and non-driving factors that serve as proxies for race and income and allow modern-day redlining are a main culprit. The use of non-driving factors puts marginalized communities at a disadvantage and creates obstacles to economic opportunity for families.”

According to the insurance search engine, The Zebra, Michigan has the highest auto insurance rates in the country, with an average premium of $2,693. Some drivers in the state are paying in the realm of $5,000 every year to get on the roads, which takes a significant chunk out of the average annual income of Detroiters.  

Watson Coleman told the Detroit Metro Times: “Car insurance is absolutely necessary for most American families, so when companies raise rates for unfair, undisclosed, and unproven reasons, families are going to be hurt. Income proxies 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 higher rates. Working families deserve better than a system that is fundamentally unfair.”