Insurance Law Alert

Yesterday, the New Jersey Senate passed Senate Bill S111, sponsored by Senators Nia Gill, M. Teresa Ruiz, Nilsa Cruz-Perez and Nellie Pou, which would prohibit the use of education, occupation, or credit score in certain automobile insurance determinations.  According to co-sponsor Senator Gill (D-Essex / Passaic), the use of factors such as employment status and credit score in calculating insurance premiums carries a severe economic consequence for working-class families.  Gill further asserts that  income or education has no bearing on driver safety or risk and only serves to reinforce existing inequalities. 

The coronavirus pandemic has impacted how carriers determine eligibility.  Because so many New Jersey residents are experiencing economic hardship which will inevitably impact their credit scores, occupation, and employment status, ratings would be skewed against them at a time when personal finances are already stretched quite thin.  Senate Bill S111, if adopted into law, will prohibit automobile insurers from assigning an insured or prospective insured person to a rating tier based on homeownership, marital status, educational level, credit score, employment status or employment, trade, business, occupation, or profession. 

The Bill must now proceed to the New Jersey Assembly and ultimately to the Governor’s desk for signature before it becomes law.

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