The US House of Representatives recently reintroduced the “Prohibition of Automobile Insurance Discrimination Act” (House Resolution No. 336), aiming to prohibit insurance companies from using factors unrelated to driving when setting premiums, such as credit scores, occupation, education, gender, postal code, etc. This bill will empower the Federal Trade Commission (FTC) to enforce it and formulate relevant regulations. Supporters believe that these non-driving factors unfairly increase the premiums for low-income drivers while reducing the insurance costs for wealthy individuals.
Supporters of the bill, such as Michigan State Representative Rashida Tlaib, criticize the current pricing method as discriminatory, arguing that postal codes and educational levels do not accurately reflect driving risks and instead exacerbate the economic burden on low-income families. Tlaib emphasizes that car insurance is a necessary expense for most families, not an optional purchase, and therefore the pricing should be more equitable.
However, insurance companies argued that these prohibited factors were helpful for more accurate risk assessment, and they successfully resisted similar legislation in multiple states. Industry representatives believed that removing these standards could lead to an overall increase in premiums, as the ability to distinguish risks would decline.
Meanwhile, the US auto insurance market is facing another set of pressures. Due to the imposition of new tariffs on imported vehicles and components, premiums are expected to increase by 14% or even as high as 19% by the end of 2025. The surge in claim costs is mainly attributed to rising repair costs, increasing prices of new vehicles, and the tightness in the used car market. Industry analysis indicates that insurance companies have responded by raising premiums and controlling costs, but there is limited room for further adjustments.
The American Property Casualty Insurance Association (APCIA) has warned that tariffs could lead to a 24 billion increase in auto insurance claim costs, further pushing up premiums. As market fluctuations persist, consumers may not see rate relief in the short term. Against this backdrop, the introduction of the “Anti-Discrimination Act for Automobile Insurance” not only concerns fair pricing but may also affect the stability of the future insurance market.
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