Judge confirms Attorney General’s authority to investigate potential race discrimination by auto insurers PEMCO and Progressive

CC™ Legal News

“Auto insurance companies made investigation public by fighting to quash inquiry into use of credit history to choose customers and price car insurance.”

Attorney General Bob Ferguson today announced that a Thurston County Superior Court judge rejected an attempt by PEMCO Mutual Insurance Company and subsidiaries of the Progressive Corporation to stop his office’s investigation of potential race discrimination against Washington drivers. The companies both use consumer credit histories — or “credit-based insurance scores” derived from a consumer’s credit history — to decide whether to sell, and at what price to sell, their auto insurance products, despite evidence that this practice disproportionately harms people of color.

PEMCO and Progressive have a significant presence in Washington state. PEMCO has issued approximately 160,000 private passenger auto insurance policies to Washingtonians; Progressive likewise insures a significant portion of Washington drivers. Both companies openly use credit history and/or credit-based insurance scores to decide who they will provide coverage to, and at what price. Publicly available information indicates PEMCO charges people with low credit scores as much as triple those with high credit scores; Progressive likewise significantly increases premiums for individuals with negative credit histories.

The companies brought the matter to court to fight the office’s investigation, making the investigation public.

The office has a longstanding policy that it does not comment on investigations, including confirming whether they exist. However, in fighting to quash the Attorney General’s investigative demands, the insurance companies revealed the investigation. Given the significant importance of, and the public interest in, the practices under investigation, the office is offering comment.

“Washington law is clear: Unfair, deceptive or discriminatory business practices are illegal,” Ferguson said. “Significant evidence shows that using credit history to price insurance disproportionately affects people of color — even when their driving history is just as safe as white drivers. My office has a responsibility to investigate race discrimination against Washingtonians. I intend to do that."

Analyses show that the use of consumers’ credit history and/or credit-based insurance scores disproportionately affects drivers who are people of color, even if their driving records are just as safe as the driving records of white drivers. In 2020, the Consumer Federation of America, a consumer advocacy group, reported that when insurance companies rely on factors having nothing to do with driving, including credit scores, to price their insurance products, Black drivers “will pay more for auto insurance than white drivers, even when everything related to driving safety and vehicle type is held constant.”

One media report notes this stems from “a long history of discrimination” in lending, banking, and government programs that is well-understood to “affect the data that credit scoring models use today.”

According to the Consumer Federation of America, “[b]ecause insurance is required in every state but New Hampshire, the disparate pricing likely causes higher levels of uninsured driving among African Americans and higher incidence of state uninsured driving penalties for African Americans, which can include fines, car impoundment, and jail. It also means less access to vehicles and reduced access to jobs, as the nexus between car ownership and employment opportunity is well established.”

The Attorney General’s Office is seeking information about PEMCO and Progressive’s compliance with the Washington Consumer Protection Act and the Washington Law Against Discrimination as part of its investigation.

Any Washingtonians with information about PEMCO’s or Progressive’s use of credit history in pricing, or deciding whether to offer, auto insurance, including people who believe they have experienced discrimination as a result of those practices, should reach out to the Wing Luke Civil Rights Division at 1-833-660-4877, and choose option 9 from the main menu. Individuals can also contact the Attorney General’s Office by email at

Assistant Attorneys General Yesica Hernandez and Patricio Marquez, and Legal Assistants Anna Alfonso and Allie Lard, handled the Attorney General’s Office’s motion to enforce its investigation demands.

The Washington Law Against Discrimination prohibits discrimination in insurance transactions on the basis of race, color, national origin, religion, citizenship or immigration status, sex, marital status, sexual orientation, disability, or honorably discharged veteran or military status.

The Wing Luke Civil Rights Division was created in 2015 to protect the rights of all Washington residents by enforcing state and federal anti-discrimination laws. It is named for Wing Luke, who served as an Assistant Attorney General for the State of Washington in the late 1950s and early 1960s. He went on to become the first person of color elected to the Seattle City Council and the first Asian-American elected to public office in the Pacific Northwest.

Individuals may file civil rights complaints here.