NJ needs to ban car insurance companies from using credit scores to set rates, advocates say
NJ needs to ban car insurance companies from using credit scores to set rates, advocates say

NJ needs to ban car insurance companies from using credit scores to set rates, advocates say

While the New Jersey Legislature is considering a charge that would prohibit non-driving factors from car insurance determinations, Koubiadis said the Department of Banking and Insurance has the authority to change its regulations on its own. A spokeswoman for the Department of Banking and Insurance said the agency doesn ’ deoxythymidine monophosphate gloss on pending legislation .

Who pays more?

Michael DeLong, a research companion for the Consumer Federation of America, which advocates for consumers, said they looked at data from the 10 largest car indemnity companies in New Jersey and found consumers with hapless credit scores pay an average of $ 1,300 more a class on their premiums — or 156 % — than drivers with estimable credit scores. “ Huge numbers of people have poor credit because of circumstances beyond their control. You could have a poor credit score because you grew up in a low-income kin and did n’t have access to credit cards or other fiscal instruments, you could besides have poor credit because you went through a aesculapian crisis and were in a bankruptcy, ” DeLong told Gothamist.

Statewide, consumers with excellent credit scores and arrant drive records pay an average annual premium of $ 842 ; those with fair credit pay on average $ 1,384. And those with poor credit pay on average $ 2,153, according to data acquired by the Consumer Federation of America from Quadrant Information Services. “ It ‘s truly unfair because it winds up being a tax on low-income people. They wind up paying more, even though they normally have less, ” DeLong said. The datum besides show New Jersey drivers living in majority Black or Latino zip codes pay about 50 % higher premiums than motorists residing in majority-white zip up codes. Delong said Black and Latino residents on modal tend to have lower credit scores, lower education levels and lower-paying jobs due to systemic discrimination.

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Widens wealth gap

Basing car indemnity policies on those same factors only exacerbates the wealth break, advocates say. “ The predatory practice of charging Black and brown university drivers higher rates based on factors having nothing to do with their drive records is indefensible, ” Nicole Rodriguez, research conductor for New Jersey Policy Perspective, said during a rally outside Trenton on Monday. DeLong said insurance companies have failed to demonstrate how these non-driving factors are connected to driving risks.

“ They ‘re not what your driving records should be based on. They have fiddling or no joining to whether you ‘re a condom driver, ” he said. Tony Scimone, a New Brunswick resident, said his car insurance increased more than $ 3,000 a class and his monthly payments rose from $ 80 to $ 374 after he purchased a fresh cable car. He said it was because of his credit score. “ My credit score has nothing to do with my driving ability, read, or hazard, ” he said at the Trenton weight-lift league. “ My drive record is excellent, why should my or anyone else ’ s recognition history be used to charge us much more ? ”

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