AUTO INSURANCE: IT’S TIME FOR NEW JERSEY TO LOWER THE SCORE


On the other side New Jersey, residents expressed growing concern about the prospect of that of New York congestion pricing plan. For a state located between two of the top 10 metropolitan regions of the we by GDP and where 91% of households have access to at least one vehicle, it is not surprising that elected officials like Gov. Phil murphy would insist “we will not give in if New Jersey commuters are discriminated against. “

New Jersey depends on transport for its economic survival. Yet most New Jersey residents might be surprised to learn that they may already be paying the price for discriminatory policies in their home country; a consequence of outdated and unfair policies that allow auto insurers to base premiums on factors such as credit rating, education, and occupation that have little to do with ability to drive.

If the leaders elected in New Jersey want to protect their constituents, they can start by ending this discriminatory policy once and for all.

Regardless of intention, the reliance on credit scores, which reflect decades of systemic economic and racial inequalities, means auto insurance policies end up biased in practice.

A recent study of Consumers Federation of America found that on average New Jersey drivers with lower annual income $ 50,000 almost paid $ 700 more for auto insurance than those with higher income $ 150,000.

To add insult to financial harm, an unfair system becomes outright discriminatory when race becomes an unintentional scoring factor.

According to Urban Institute, 58% of white households have FICO credit scores above 700, while only 26% of black households have them. Looking at auto insurance rates through New Jersey you can see the destructive impact of historical disparities.

Auto insurance aims to protect consumers, not to trap them in economic hardship. It’s time to make insurance fairer and more equitable. Six states have already taken steps to limit or prohibit the use of credit scores to determine auto insurance rates.

Here in New Jersey, the legislation already exists.

The Fair Auto Insurance Rates Act (A-1657 / S-111) would achieve this goal by prohibiting insurance companies from using education, profession or credit rating to price premiums. And while he was adopted by the State Senate almost a year ago, he still sits in the assembly.

Eliminating credit-based pricing is not just a moral good, it is an economic imperative. In addition, given recent polls from Rutgers Showing that 39% of residents cite taxes as their main concern, policies that would increase competition and reduce costs for large swathes of the state are politically and economically beneficial.

Over the past decade, major technological advancements have enabled companies to measure risk based on actual driving behavior. For example, customers of Root insurance can install an app that measures driving habits such as hard braking, speed of turns and whether someone is using their phone while driving. This allows Root to calculate a rate that more accurately reflects how a customer drives and how risky they are behind the wheel.

It is time for the Assembly to rise for the workers New Jersey residents by supporting the FAIR Act.

Alex timm is CEO of Root insurance, situated at Columbus, Ohio.

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