Published: August 2015

Keep auto insurance affordable for everyone

The Federal Insurance Office (FIO) must establish a strong affordability standard for low- and moderate-income Americans, according to nearly 50 organizations from 23 states and DC that jointly submitted comments to FIO. The groups called on FIO to move forward with its proposal to collect data directly from insurance companies and review the cost of basic liability auto insurance for tens of millions of financially strained drivers.

The Federal Insurance Office (FIO) issued a request for comments on its proposal to create an affordability index that deemed auto insurance affordable if it cost less than two percent of the household income of low- and moderate-income drivers and other underserved Americans. The proposal aims to address a central requirement of the part of the Dodd-Frank financial reform law that created FIO in 2010. Consumer, civil rights, and community groups that jointly submitted a letter to FIO, offered support for the two percent index but cautioned that the way FIO determined both the income levels and the price of insurance would determine the validity and utility of the index.

In their letter, the advocate groups provided guidelines that FIO should use to determine the average income of "Affected Persons" – identified in Dodd-Frank as low- and moderate-income, minority and those in underserved communities. The groups also offered suggested parameters for the consumer profiles that should be used by FIO to determine the actual cost of basic auto insurance faced by low- and moderate-income drivers and others in underserved communities.

Lead Organization

Consumer Federation of America (CFA)

Other Organizations

Americans for Financial Reform | Consumer Action | Consumer Federation of America | Consumers Union | NAACP | National Association of Consumer Advocates | National Consumer Law Center (on behalf of its low-income clients) | U.S. PIRG | United Policyholders

More Information

To read the coalition letter, click here.

For more information, visit CFA's website.

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