S 2763Insurance

Motor and Other Vehicles - Motor Vehicle Reparations Act

Insurance companies can no longer use your credit score to determine the price of your car insurance.

Held for study

Population
Affected

Introduced Mar 4, 2026Committee Senate Commerce

Plain-English Summary

This bill changes the rules for how automobile liability insurance rates are calculated in Rhode Island. It specifically forbids insurance companies from using an applicant's credit history or credit score to determine their insurance premium. Instead, the bill requires insurers to base their rates solely on the driver's past claim experience, such as accidents and violations, using "merit rating" or "experience rating" principles. The goal is to ensure insurance costs reflect driving behavior rather than financial standing.

For younger readers

When adults drive cars, they must buy insurance, which is a promise that a company will pay for repairs if there is a crash. Right now, insurance companies look at a "credit score" to decide how much to charge. A credit score is a number that shows if a person pays their bills on time. This bill says companies cannot use that score anymore. Instead, they can only look at how safely the person drives and if they have been in accidents before to decide how much the insurance costs.

Who & Where It Applies

Impacted groups

Car OwnersDriversInsurance CompaniesPeople with low credit scoresPeople with high credit scores

Impacted communities

All

Constitutional & Fiscal Check

None Likely

Estimated cost

None

Estimated revenue

None

Bill Analysis

Both viewpoints

For Progressives

Eliminates a discriminatory practice that effectively taxes poverty, ensuring that low-income individuals are not charged higher rates for essential services simply because of their financial status.
Reduces systemic racial bias in the insurance market, as credit scores often reflect historical wealth disparities that disproportionately affect communities of color.
Ensures that insurance premiums are based on actual driving behavior and safety rather than economic standing, promoting fairness for working-class families.
Could potentially raise rates for some responsible low-income drivers who have managed to maintain good credit scores, as they lose the discount associated with that score.
Might cause some insurance providers to leave the state market due to perceived inability to assess risk, potentially reducing competition.
Does not address other discriminatory factors used in rate-setting, such as zip codes, which can still be used to charge higher rates in disadvantaged neighborhoods.

For Conservatives

Promotes a merit-based system where individuals are judged solely on their personal responsibility and actions behind the wheel rather than their financial history.
Protects consumer privacy by preventing insurance corporations from analyzing personal financial data that is not directly relevant to driving ability.
Ensures that the cost of services reflects the actual risk associated with the service provided (driving) rather than unrelated metrics.
Represents government overreach into the free market by dictating which risk assessment tools private businesses are permitted to utilize.
Prevents insurers from using actuarial data that statistically correlates credit stability with risk, which could force companies to operate less efficiently.
Will likely result in higher premiums for financially responsible citizens with good credit, effectively forcing them to subsidize those with poor financial histories.

Votes

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Full Bill Text

Changes to existing Rhode Island law · 3 additions

SECTION 1. Section 31-47-18 of the General Laws in Chapter 31-47 entitled "Motor Vehicle Reparations Act" is hereby amended to read as follows: 31-47-18. Automobile liability insurance rates. Any general or public law to the contrary notwithstanding, the commissioner shall, after consulting with all insurers licensed to write automobile liability insurance in this state, promulgate regulations which provide that automobile liability insurance rates shall not take into account the credit history or credit score of the applicant for insurance, but shall only take into account the past claim experience of the applicant for the insurance and incorporate the principles used in so called “merit rating” or “experience rating” rate plans which are now in effect in other states.

SECTION 2. This act shall take effect upon passage.