Businesses and Consumer Groups Speak Out against New Jersey Assembly’s Failure to Advance Bill to End Auto Insurance Pricing Discrimination

Businesses and Consumer Groups Speak Out against New Jersey Assembly’s Failure to Advance Bill to End Auto Insurance Pricing Discrimination

More than 10,000 New Jersey residents have written letters urging assembly lawmakers to push forward A-1657, which the state Senate passed in January.

Trenton—A coalition of business leaders, racial justice groups and consumer advocates today called on the New Jersey Assembly and Assembly Speaker Craig Coughlin for their inability to move forward S111 / A-1657, that would help end racial discrimination in setting auto insurance rates. The Senate passed the bill in January, but it remains pending in the Assembly’s Financial Institutions and Insurance Committee, and was not discussed at today’s committee meeting. hui, one of the final audiences of this year’s lame session.

Coalition members said a failure to move the bill forward ignores more than 10,000 New Jersey residents who have written letters to their members of the Assembly asking them to quickly pass legislation. It also helps perpetuate long-standing racial and socio-economic inequalities in auto insurance pricing that force black and brown drivers to pay higher premiums and make it much harder for communities of color to obtain. affordable transportation and prosperity.

“This is a racial and social justice priority that needs to be addressed now, not next year or the year after,” said Cuqui Rivera, Executive Secretary of the Latin Action Network. “Auto insurance is a big expense and essential for any family looking to build wealth and economic security. Mr. Speaker Coughlin, it is time for the Assembly to put an end to auto insurance policies that have devastating consequences for Latin American and black communities and our most vulnerable residents.

“It is evident from the drivers we have heard from that the use of credit rating, occupation and education as factors in determining auto insurance premiums is wrong and should be abolished in our State “, said John Harmon Jr., president of the New Jersey African American Chamber of Commerce. “It’s mind-boggling to me that an elected official in our state, let alone the Speaker of the Assembly, seeks to perpetuate a practice that increases auto insurance premiums for New Jersey drivers, and which has nothing to do with an individual’s driving record. “

“As the voice of 120,000 Hispanic small business owners in the State of New Jersey, we believe that harmful insurance policies directly affect the growth of our business community.” said Carlos Medina, president and CEO of the New Jersey State Hispanic Chamber of Commerce. “Our small businesses contribute more than $ 20 billion to the state’s economy, and setting policies with impartial criteria and fair rates will benefit our economy and the minority community as a whole.” We need our legislators in the House to defend and move this bill forward. “

Currently, New Jersey auto insurance companies are permitted to set rates in part using factors such as a person’s education, credit rating, and employment. These factors do not reflect the driving history of consumers, but serve as indicators of income and race.

Research compiled by the Consumer Federation of America in 2020 found that New Jersey drivers mostly living in black and latino communities were-billed higher premiums on average than drivers living in New Jersey’s predominantly white communities. People predominantly living in black zip codes pay 49.5% higher premiums and people living predominantly in Latino postcodes pay 49.9% higher premiums. This is true even for drivers in majority minority neighborhoods with an impeccable driving record. The practice of using education, credit scores and employment to set prices offers discounts to white drivers with dangerous driving records while unfairly raising the prices of low-income black and brown drivers with records. good, if not perfect, conduct.

S111 / A-1657 was defended in the Senate by Senators Nia Gill, Teresa Ruiz, Nilza Cruz-Perez and Nellie Pou, and would prevent insurers from using credit scores, employment and education to set auto insurance rates. U.S. Senator Cory Booker and Congresswoman Bonnie Watson Coleman introduced similar legislation at the federal level in fall 2020, the Auto Insurance Prohibition of Discrimination Act (PAID) —HR 3693.

But the coalition notes that the hard work of these lawmakers of color has been targeted by the insurance industry’s disinformation efforts. The industry is not transparent with consumers about how they set prices, and is particularly discreet about the discriminatory factors they heavily rely on to set prices.

“It is time for our entire legislature to come together to end the downward spiral that many black and Latin drivers are experiencing as a result of these institutionalized racist insurance pricing policies,” said James Williams, director of racial justice policy at the Fair Share Housing Center. “We commend the Senate for doing its part. Now President Coughlin and the Assembly must do theirs by fully supporting A-1657 and voting against systemic racism. “

“We elected our Assembly to ensure that all New Jerseyans have the same opportunities to prosper” said Dena Mottola Jaborska, associate director of New Jersey Citizen Action. “Delaying this vote perpetuates a long-standing ordeal for our communities of color and our working families. We urge the Assembly to put their interests ahead of those of insurance companies and to act now. ”

The insurance industry claims the legislation would disrupt the New Jersey market, result in higher insurance rates for everyone, and prevent insurers from making a profit. But the evidence shows that these claims are baseless. Massachusetts, New York, California and Michigan have already banned work and education as a fact of auto insurance pricingrs; Massachusetts, California and Hawaii have also banned the use of credit scores. Auto insurance markets are stable and perform quite well in these states. Similar legislation is pending in other states in the country.

Research from CURE Auto Insurance, the only insurer in New Jersey that does not use education, profession and credit score to set customer rates, shows that this legislation would not result in higher average premiums for New Jersey drivers. Root Insurance, which offers lower insurance rates for drivers who score well on app-based driving tests, is eager to test the New Jersey market once the bill passes.

“New Jersey Consumers Deserve Fairer Auto Insurance Rates,” said Julie McPeak, assistant general counsel for Root and former commissioner for the Tennessee Department of Commerce and Insurance. “The move of S-111 / A-1657 will pave the way for New Jersey residents to access auto insurance based primarily on their ability to drive, not on discriminatory factors such as education and occupation. . “

The coalition includes the New Jersey African American Chamber of Commerce, New Jersey Hispanic Chamber of Commerce, Latino Action Network, Fair Shair Housing Center, Consumer Reports, New Jersey Citizen Action, SEIU 32BJ, Faith in New Jersey, New Jersey Anti-Poverty Network, Consumers Federation of America, Root Insurance, CURE Auto Insurance. New Jersey Policy Perspective and New Jersey Alliance for Immigrant Justice.

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