New Jersey Assembly Bill A2427

New Jersey 2024-2025 Regular Session

• Introduced: 1/9/24
• Refer: 1/9/24

Caption

Prohibits use of education, occupation, and credit score as rating factors in automobile insurance underwriting.

Impact

The enactment of A2427 would significantly affect how automobile insurers calculate and assign risk. By eliminating the consideration of educational attainment and credit history, the bill aims to provide a more level playing field, particularly for individuals from lower socioeconomic backgrounds who may be disproportionately affected by such factors. This change could lead to more affordable insurance rates for many drivers, enhancing access to auto insurance across different demographic groups in the state.

Summary

Assembly Bill A2427 aims to reform the underwriting practices of automobile insurers in New Jersey by prohibiting them from using an applicant's educational level, occupation, or credit score as factors in determining insurance rates. This legislation seeks to make the process fairer and more equitable for all potential insured individuals, mitigating biases that may arise from these factors. The bill is sponsored by Assemblywoman Annette Quijano and Assemblyman Wayne P. DeAngelo, among others, signaling support from key legislative figures.

Contention

The bill has the potential to spark debate among various stakeholders in the insurance industry and consumer advocacy groups. Proponents argue that using education and credit score as rating factors perpetuates inequality and can unfairly impact drivers who may not have higher education or good credit, thus stifling their ability to obtain necessary insurance coverage. Conversely, some opponents may express concerns about insurers' ability to assess risk and could argue that these metrics provide valuable insights into driving behavior and risk profiles, potentially leading to higher overall costs.