Wednesday, 28 October 2020 21:07

Legislation to Combat Unfair Auto Insurance Rates Clears NJ Senate Committee


In response to high automobile insurance assessments, New Jersey's Senate Commerce Committee passed legislation sponsored by Sens. Nia Gill, D-Essex/Passaic; M. Teresa Ruiz, D-Essex; Nilsa Cruz-Perez, D-Camden/Gloucester; and Nellie Pou, D-Bergen/Passaic; that would prohibit the use of education, occupation, homeownership status, marital status or credit score in certain automobile insurance determinations.

“The use of factors such as employment status and credit score in calculating insurance premiums carries a severe economic consequence for working-class families. A person’s income or education has no bearing on driver safety or risk and only serves to reinforce existing inequalities,” said Gill. “The pandemic has given new importance to how we determine eligibility. Millions of New Jerseyans are experiencing economic hardship; this will inevitably impact their credit scores, occupation and employment status.


"This bill is critical to ensure people are not subject to increased premiums based on metrics that have nothing to do with driving, and it will ensure drivers are not subject to increased premiums based on unforeseeable consequences of the pandemic.”
The bill, S-111, would prohibit automobile insurers from assigning an insured or prospective insured person to a rating tier based on educational level, credit score, marital status, homeownership status, or employment, trade, business, occupation or profession.
“Newark has some of the highest car insurance rates in the country. Under our current laws car insurance companies are preying on New Jersey’s most vulnerable, charging low income customers significantly more regardless of their driving history," said Ruiz. "Every sponsor has done tremendous legwork to bring an end to this harmful practice.


"I am proud to have been a driving force in the final push to move this important legislation and to ensure it included prohibiting the use of credit scores. Insurers should be basing their rates on the likelihood that someone will be in an accident, not his or her ability to pay for those damages out of pocket.”

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