Guide to Approaching Car Insurance Discrimination Against People With Low Income

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State laws and regulations allow car insurance companies to use many factors when determining rates, leading to discrimination among specific groups. Members of minority groups, people earning low incomes, young drivers, senior drivers and people without a college degree are a few groups negatively impacted by high car insurance premiums. Learn how to spot auto insurance discrimination in its many forms, ways to reduce high premiums and how lawmakers are driving change to reduce car insurance price discrimination.

Who Is Impacted by Auto Insurance Discrimination?

Though auto insurance discrimination happens to several subsets of people, those in the Black community are most impacted by price discrimination. MoneyGeek, ProPublica and the Consumer Federation of America have put out studies showing the disproportionately high rates drivers in minority communities pay compared to ZIP codes with predominantly white residents. The American Property Casualty Insurance Association refutes these claims, arguing that insurers don't use income or race data when determining rates for drivers. While that may be true, minority groups tend to live more in urban areas. Some of these areas lie in ZIP codes that may statistically have more auto insurance claims compared to suburban and rural areas.

Types of Discrimination

While systemic racism is a huge problem in auto price discrimination, it is unfortunately not the only type of discrimination. With so many factors used by car insurance companies, and not all of them weighing factors the same, it can be difficult to know just how much each form of discrimination negatively affects the cost of car insurance.

Common Questions Asked About Car Insurance Discrimination

When it comes to car insurance price discrimination, MoneyGeek answers the most common questions below to help you better understand this pricing phenomenon.

What You Can Do if You Are Discriminated Against


If you feel you are being discriminated against while purchasing auto insurance, you have several courses of action to take. While it can be frustrating to deal with discrimination, there are agencies you can report to and measures you can take to protect yourself from discrimination by car insurance companies.

Consider taking one or more of these steps to reduce your car insurance premiums and report discrimination.

What Policymakers and Insurers Are Doing to Help

State and federal lawmakers and industry watchdogs are calling for reforms that would limit or do away with discriminatory car insurance practices by the insurance companies.

The U.S. House of Representatives and Senate

In July 2019, Rep. Bonnie Watson Coleman introduced the Prohibit Auto Insurance Discrimination Act, or PAID Act, before the U.S. House to combat car insurance price discrimination. Rep. Rashida Tlaid introduced the Preventing Credit Score Discrimination in Auto Insurance Act as a companion bill to the PAID Act. Senator Cory Booker re-introduced the PAID Act in September 2020, which sets to eliminate all non-driving factors from car insurance rating and eligibility, using only a person's driving record instead. Both acts remain in committee at this time.

Economic Watchdog Groups

In June 2020, the Center for Economic Justice called on the National Association of Insurance Commissioners to study and respond to car insurance discrimination. The Special Committee on Race and Insurance, created by the NAIC, is working in 2021 to conduct research and analyze the insurance industry. Action steps are expected by the end of the year.

State Insurance Commissioners

In January 2019, the California insurance commissioner issued new regulations prohibiting gender in insurance ratings under the Gender Non-Discrimination in Automobile Insurance Rating Regulation. In February 2021, newly appointed commissioner Ricardo Lara revised draft regulations to allow drivers with low incomes to access group discounts to reduce auto insurance price discrimination.

The insurance commissioner of Washington, Mike Kreidler, issued an emergency rule in March 2021 prohibiting insurers from setting rates based on credit score for auto and home insurance for three years.

What Should You Do if You Can’t Pay Your Car Insurance?


The rate you pay for car insurance can vary widely depending on your age, gender, driving profile, vehicle type and coverage limits. If you find yourself unable to pay your car insurance, it may be tempting to stop paying it. Almost all states require you to have car insurance on all registered vehicles. Failure to do so could result in fines or tickets, and your license could be suspended along with your registration. Worse, if you drive without insurance and are involved in an accident, you could be ticketed, go to jail and have to pay out of pocket for the damage or injuries you cause.

Make Sure Your Premium Is Compliant With the Law

Every state except New Hampshire requires you to have a minimum amount of liability insurance to protect other drivers and pedestrians. The amount varies, with some requiring other coverages such as personal injury protection and uninsured motorist coverage. Drivers who choose state minimums pay higher premiums than those with higher liability limits, so consider that when insuring your car. Review your driving profile with your insurance carrier for accuracy to reduce the risk of auto insurance price discrimination.

Available Discounts

Taking advantage of all the available discounts offered by your car insurance company can also keep rates affordable. Ask about all discounts, which vary by state and carrier. If your driving habits change over time, don’t forget to mention it to your insurance company to see you’re now eligible for a discount or a reduction in premium cost.

Protection Resources for Drivers

If you feel you've been a victim of auto insurance price discrimination in any form, there are many resources available to help you. This group of nonprofits, government resources, state-level programs and more can assist you with your claim and help you find an attorney or other legal recourse to fight discrimination.

  • Federal Insurance Office: The FIO was created to monitor the insurance industry and how underserved communities are being treated within the industry. FIO will also take complaints and provide further resources to file claims about auto insurance price discrimination.
  • Consumer Federation of America: The CFA is a group of consumers working against unfair and discriminatory practices by calling on state insurance departments and legislatures to end using socioeconomic factors.
  • Consumer Financial Protection Bureau: The CFPB has a consumer complaint database for consumers to file complaints which are sent to companies for response. Afterward, responses are published, which can help determine which company to do business with.
  • Consumer Reports: This independent nonprofit offers fairness, transparency and truth for consumers to make the best choices in the marketplace to spend their money.
  • Consumer Watchdog: This non-partisan group works with consumers to expose injustice and discrimination by investigating claims and bringing national attention where needed. Advocacy and help with legal claims can also be found here.
  • National Association of Insurance Commissioners: The NAIC supports insurance regulators to protect consumers by keeping a fair insurance market. Learn about insurance products, search for insurance company complaints and file your own complaint about a company or agent.
  • National Conference of State Legislatures: Learn about state policy and proposed legislation on car insurance discrimination. The NCSL helps to advance ideas in your state and federally on all topics.
  • National Disability Rights Network: The NDRN can help if you feel you've been discriminated against due to mental or physical disability. Each state has a disability advocate to help with legal recourse and other resources.
  • United Policyholders: This nonprofit organization provides resources and a voice for consumers in all states and for all types of insurance to "level the playing field between insurers and insureds."
  • This resource link can help you find your state consumer protection office to file a complaint about auto insurance prices and other forms of discrimination.

About the Author


Mandy Sleight is a professional freelance writer and licensed insurance agent. She has her property, casualty, life, and health licenses and has been working in the industry since 2005. Mandy has worked for well-known insurance companies like State Farm and Nationwide Insurance, and most recently as the Operations Coordinator for a start-up employee benefits company.

Mandy earned her Bachelor of Science degree in Business Administration and Management from the University of Baltimore and her Master in Business Administration from Southern New Hampshire University. She uses her vast knowledge of the insurance industry and personal finance combined with her writing background to create easy-to-understand and engaging content to help readers make smarter choices with their budget and finances.