New Jersey's Insurance Regulators Under Fire Over "Thinly Veiled Discrimination"
A lawsuit filed by the New Jersey NAACP, Latino Action Network, and Latino Coalition of New Jersey claims that state insurance regulators have allowed insurers to engage in "thinly veiled discrimination" when setting car insurance rates. The plaintiffs argue that using factors such as education and occupation as proxies for income unfairly targets low-income and minority drivers.
According to the lawsuit, this practice skews premiums based on a driver's socioeconomic status rather than their actual risk level. Consumer advocacy groups have long pushed for the banishment of these practices, with limited success in recent years.
The use of education and occupation data has been shown to disproportionately affect drivers from lower-income backgrounds, even among those who are good drivers. Neighborhoods with majority non-white populations often experience higher car insurance rates, despite similar accident costs.
State officials have long maintained that the factors are used fairly to set premiums, but a 2008 report by the New Jersey Department of Banking and Insurance found that they did not push overall premiums higher for residents with lower educational or occupational attainment. In fact, Geico's use of these proxies resulted in rates that were often lower than those offered by competitors.
However, research from Consumer Reports Digital Lab has shown that lower-ranked workers typically paid more for car insurance than their higher-educated counterparts. At least five states have already barred the use of such factors in car insurance rate setting.
Despite efforts by lawmakers to outlaw these practices, they remain unchanged. The lawsuit seeks a declaration that the use of income proxies in insurance rate setting is unconstitutional and has asked a judge to take action against state regulators for violating anti-discrimination protections and constitutional equal protection guarantees.
A lawsuit filed by the New Jersey NAACP, Latino Action Network, and Latino Coalition of New Jersey claims that state insurance regulators have allowed insurers to engage in "thinly veiled discrimination" when setting car insurance rates. The plaintiffs argue that using factors such as education and occupation as proxies for income unfairly targets low-income and minority drivers.
According to the lawsuit, this practice skews premiums based on a driver's socioeconomic status rather than their actual risk level. Consumer advocacy groups have long pushed for the banishment of these practices, with limited success in recent years.
The use of education and occupation data has been shown to disproportionately affect drivers from lower-income backgrounds, even among those who are good drivers. Neighborhoods with majority non-white populations often experience higher car insurance rates, despite similar accident costs.
State officials have long maintained that the factors are used fairly to set premiums, but a 2008 report by the New Jersey Department of Banking and Insurance found that they did not push overall premiums higher for residents with lower educational or occupational attainment. In fact, Geico's use of these proxies resulted in rates that were often lower than those offered by competitors.
However, research from Consumer Reports Digital Lab has shown that lower-ranked workers typically paid more for car insurance than their higher-educated counterparts. At least five states have already barred the use of such factors in car insurance rate setting.
Despite efforts by lawmakers to outlaw these practices, they remain unchanged. The lawsuit seeks a declaration that the use of income proxies in insurance rate setting is unconstitutional and has asked a judge to take action against state regulators for violating anti-discrimination protections and constitutional equal protection guarantees.
Anyway, my grandma had to shell out more for her insurance because she was a nurse, but her neighbor who worked at the factory got the better deal. It's like they're trying to say that some folks are just more deserving of lower premiums than others... I don't get it.
Can we just be clear about the issue here? Either these regulations are working, or they're not. But do we really need to go through all this drama to figure it out? I'm just worried that some insurer's gonna find a way to game the system and screw over those good drivers who can't afford higher premiums... 
This is so unfair 
I mean, can't they just look at your actual driving record instead of what your parents did or where you went to school? It's like, hello, good driver vs bad driver, that's all it should be about! 
And what's with the occupation thing? Are they assuming all low-income people work in certain jobs and can't afford to pay more for insurance? 
It's just ridiculous. I know some people who are high school dropouts but great drivers, and others who have degrees but still get slammed with prices because of their job. It's not right! 
This is exactly the kind of regressive practice that gets us talking about structural inequality in this country. The fact that they've been using these tactics for years without being called out is a huge red flag. And now we're at the point where it's a lawsuit, and even then, some states have already banned it. It's like, what took them so long to catch on? 
, it's so interesting how insurance companies can affect people's lives like this. I feel bad for those low-income drivers who are already struggling to make ends meet. 
It seems kinda unfair that neighborhoods with majority non-white populations get hit hard by these discriminatory practices. 
, you know? These insurance regulators are basically playing a game of "systemic inequality" and it's not cool at all 
. I mean, think about it, using education and occupation as proxies for income is like they're trying to punish people just because they didn't get the same opportunities that others had 
.
. It's not about handouts or special treatment, it's about making sure everyone has access to the same opportunities and resources 
. And if some insurers think they can get away with using these tactics because "it's just a proxy for income", well, that's just not true 
.
. I'm all about promoting equality and fairness in everything we do 
.
! I feel like we're making progress, but still not getting there 
. It's crazy that states are still using education and occupation as a proxy for income... it's just not fair 
. Can't we use data to determine actual risk levels instead? 
. It's like, what even is the point of using these factors if they're just gonna skew premiums based on socioeconomic status? 
. But we need more progress here 
we need some real change here, not just lip service from lawmakers who don't understand the issue.
"The only thing necessary for the triumph of evil is for good men to do nothing." - Edmund Burke 
. That's not right, fam 
! The system is already stacked against us, and now they want to make it even harder to get affordable coverage? No thanks 