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119-hr-3664119th CongressWALLET

PAID Act

Sponsored By: Representative Watson Coleman, Bonnie [D-NJ-12]

Introduced

Summary

Ban on discriminatory proxies in auto insurance pricing. This bill would prohibit private passenger auto insurers and their affiliates from using income proxies and many demographic or location-based factors when deciding eligibility or rates, while requiring transparency and reporting to the Federal Trade Commission.

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  • Drivers and families: Consumers could not be charged differently or denied discounts or coverage based on factors like gender, education, occupation, home ownership, ZIP Code, census tract, credit score, prior insurer, or prior purchases from that insurer.
  • Insurers and models: Insurers and affiliates would have to submit information to the FTC not later than 1 year after enactment and then every 2 years showing their marketing, underwriting, rating, claims handling, and any algorithms do not disparately impact protected groups. All underwriting rules and rate filings must be publicly available and may not be treated as trade secrets.
  • Enforcement and remedies: The FTC would enforce violations as unfair or deceptive acts with civil penalties of at least $2,500 per violation. Consumers could sue for willful or negligent violations and states could bring parens patriae actions on behalf of residents.

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Bill Overview

Analyzed Economic Effects

4 provisions identified: 4 benefits, 0 costs, 0 mixed.

No car insurance rates by credit or ZIP

This bill would bar auto insurers and their affiliates from using gender, education, job, employment status, home ownership, ZIP Code or nearby ZIPs, census tract, marital status, credit score, credit-based insurance score, consumer report, previous insurer, or prior purchase from that insurer to set eligibility or rates. A violation would include using any banned factor in a way that keeps you from the lowest rate, blocks discounts, or changes your premium or coverage. It would cover private passenger cars (generally under 15,000 pounds and not used for business, except most farm use). These rules would start 1 year after enactment.

You could sue your car insurer

If enacted, you could sue for willful or negligent violations. For willful violations, you could get actual damages, possible punitive damages, and your reasonable legal fees. For negligent violations, you could get actual damages and your reasonable legal fees. You must file by the earlier of 2 years after you discover the violation or 5 years after it happened. Insurers could defend themselves by showing they used reasonable compliance procedures, and courts could award fees for bad‑faith filings. These rights would start 1 year after enactment.

Public rules and anti-bias checks for insurers

Insurers would need to report to the FTC within 1 year, and then every 2 years, to show their marketing, underwriting, rating, claims, and fraud tools do not harm protected groups. All underwriting rules and rate filings would have to be public and could not be treated as trade secrets. These transparency and reporting rules would start 1 year after enactment.

Stronger FTC and state enforcement on insurers

Violations would be treated as unfair or deceptive acts under the FTC Act, with FTC enforcement and at least $2,500 per violation in civil penalties. The FTC could issue rules to carry this out. State attorneys general could sue on behalf of residents, with notice to the FTC, and the FTC could join those cases. State laws would generally still apply; the federal rule would control only where a state rule conflicts. These enforcement rules would begin 1 year after enactment.

Sponsors & CoSponsors

Sponsor

Watson Coleman, Bonnie [D-NJ-12]

NJ • D

Cosponsors

  • Rep. Tlaib, Rashida [D-MI-12]

    MI • D

    Sponsored 5/29/2025

  • Rep. Takano, Mark [D-CA-39]

    CA • D

    Sponsored 5/29/2025

Roll Call Votes

No roll call votes available for this bill.

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