Discriminatory auto insurance penalizes New Jersey drivers | Opinion – The Philadelphia Inquirer
Before the Civil Rights Act was passed, life insurance companies in America sold various policies to blacks, giving them higher rates and inferior benefits than whites. The Civil Rights Act of 1964 prohibited the use of races. Unfortunately, it was at this point that life insurance companies began to use a person's level of education and occupation as a substitute for a proxy.
Since the auto insurance reform in 2004, New Jersey businesses have used education and profession to determine auto insurance rates. Most New Jersey residents are unaware of the truth behind the filthy secret that insurers will charge more to drivers who have only graduated high school, or have a "worker job," or "less than perfect" credit, regardless of their spotlessness Driving balance. These auto insurance companies, which for years have forced millions of safe New Jersey drivers to pay up to 40% more than college-graded homeowners, were a focus of the New Jersey Senate, which passed a bill in January banning the practice on the lower-income Harms communities and minorities.
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Unfortunately, despite numerous calls to tackle this insidiously discriminatory public order, few act. We are looking for our main democratic leaders to hear the pleas from those who listened when they needed our support. As we are approaching the end of a cul-de-sac, there are only two ways to turn. We ask you to choose “right”.
It should be noted once again that in a state that requires all drivers to take out car insurance, ensuring fairness should be at the forefront of legislation. The notion that any auto insurance company should be able to charge more of those in poor financial condition just because they are less profitable is clearly wrong.
By basing tariffs on “income proxies” such as work, educational qualifications, creditworthiness and home ownership, the auto insurance industry has created an unfair class system that rewards high-income drivers with the best tariffs and punishes those with lower socio-economic values with significantly higher rates, although they drive well. Why? Put simply, wealthier people tend to have other assets like houses, RVs, and boats, so they buy more coverage, which means they also tend to make the highest profits for insurance companies. The next time you hear the word bundle in a car insurance advertisement, you will notice the following: People on lower incomes often have nothing to bundle up.
Case in point: in this discriminatory practice, a person with a medical degree and a DUI conviction on his or her file actually pays less than a restaurant worker with a high school diploma and crystal clear driver's license.
Existing and systemic racial inequalities in education, occupation, and economic performance mean that the state's black drivers are likely to pay more or, worse, not be able to afford car insurance. But without insurance you cannot “legally” drive to work, which further limits options and continues a cycle of oppression. The impact of these biased rate-setting practices on communities of color was illustrated by Consumer Reports, which stated that "Your education and job could mean you are paying too much for auto insurance."
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Our organizations represent the thousands of minority communities across New Jersey who played a major role in the election of Governor Phil Murphy and Congregation Speaker Craig Coughlin. But today, four years later, these people we represent are waiting and growing tired of failed promises to dismantle this building block of systemic discrimination that is anchored in so many aspects of society.
It has been almost eight months since the FAIR Act (Bill S-111) was passed by the Senate, but its accompanying bill (A-1657) sits and sits in congregation awaiting a vote that comes from the Financial Institutional and Insurance will be published committee. New Jersey stands ready to join a growing number of states like New York and Michigan that ban these unfair and ubiquitous practices. Let's use the lame duck session to promote something that really matters. It's time to ban New Jersey auto insurance companies from using resident education, occupation, marital status, home ownership, and creditworthiness in determining premiums.
The New Jersey Democratic leadership can seize the opportunity to make a significant impact by correcting this gross inequality and creating a fairer, more equitable motor insurance market for all – by supporting the FAIR Act.
John Harmon Sr. is President of the African American Chamber of Commerce of New Jersey and Richard T. Smith is a member of the NAACP National Board of Directors and President of the NAACP New Jersey State Conference.