, occupation, or education to determine their rates in the state.
Proponents of the bill argue that using these factors to calculate insurance premiums is unfair to working-class families and that they don’t help insurers distinguish the good drivers from the bad.
But since the Senate voted in favor of the bill, others have spoken out against the bill. They argue that if it becomes a law, S-111 will raise premiums for most New Jersey drivers. They also point to studies they say prove that these factors reduce insurance costs for low-risk drivers.
Learn more about the bill, the controversy surrounding it, and how to find
, and similar bills are in the works in Colorado, Maryland, Oregon, Washington, and West Virginia.
The COVID-19 pandemic’s effect on the economy also motivated state politicians to enact the bill before damaged credit scores begin to increase the insurance rates of New Jerseyans.
, former New Jersey banking and insurance commissioner Holly Bakke said the bill will discourage a competitive insurance market in the state and inevitably cost most consumers more money.
She pointed to four studies that show that the factors the bill will outlaw "accurately predict how risky a driver is and are not proxies for race or income."
She also referred to current insurance reform laws in New Jersey that already "aggressively" regulate how insurers can use credit scores to determine their rates.
Instead of banning the use of these factors, Bakke argued that the government should focus on legislation that encourages competition and innovation. "Sadly," she said, "S-111 does just the opposite."
There are a lot of differing opinions on whether using credit scores, education, or occupation to determine rates actually discriminates against lower-income families and people of color. Whether banning the practice will save or cost consumers money is also up for debate.
But no matter which way the law lands, all New Jersey drivers must have the state’s minimum required insurance coverage of at least $5,000 property damage liability per accident and $15,000 PIP per person.
The average price for New Jersey’s minimum coverage is $3,611—$2,477 more than the national average for full coverage. If that number makes you sweat, you’re in luck. Shopping with
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