Minority and Working-Class Drivers Allege Higher Auto Insurance Rates in New Jersey Due to Education and Job Factors
New Jersey lawsuit claims minority and working-class drivers pay unfairly higher auto insurance rates because carriers can use education and job title as rate determinants. Civil rights groups say this practice disproportionately affects Black, Hispanic, and blue-collar drivers and may violate state law.
The lawsuit, filed by state NAACP chapters and Latino advocacy groups, claims that allowing insurers to base premiums on a driver’s education or occupation discriminates against people based on race and income. Even if the driver’s record doesn’t warrant a higher rate, insurers use these factors as risk proxies.
The complaint alleges that the state’s regulatory framework allows insurers to use occupation and education instead of race or income to circumvent anti-discrimination laws. Since education and employment often mirror socioeconomic and racial divisions, the plaintiffs argue that this distinction is illusory. The suit seeks judicial review to declare these underwriting practices unconstitutional and against New Jersey insurance laws.
New Jersey Monitor
This New Jersey debate dates back nearly two decades. On a 2008 report by the New Jersey Department of Banking and Insurance, lower-income and non-professional drivers were less likely to receive favorable insurer rates.Legislation to limit job and education rate factors failed in the legislature, leaving the practice unchanged.
However, insurers and regulators argue that education and occupation are only one part of a complex set of risk-based factors and do not alone raise premiums for low-income drivers.
These lawsuits raise fundamental questions about auto insurance fairness and risk assessment for working-class and non-college-educated New Jersey drivers. If successful, the challenge could force insurers to change premium driver evaluations and regulators to tighten proxy discrimination rules.
It’s unclear how the courts will rule and whether state regulation will change to limit education and job status in rate-setting. Drivers affected by these underwriting practices may now be able to sue for premium transparency.
Sources
New Jersey Monitor
Employment-Labor Law
