Fair and Affordable Auto Insurance Rates Campaign
(Also See: Insurance, Banking and Community Reinvestment Campaign)
Welcome to NJCA's new Issue Campaign focused on Fair and Affordable Auto Insurance Rates. This Campaign was originally included as part of our Insurance, Banking and Community Reinvestment.
Fair and Affordable Auto Insurance Rates for NJ Drivers
NJCA Releases Report Documenting the Discriminatory Price Impact GEICO's Use of Education and Occupation has on Lower Income and Minority Drivers
GEICO and other major auto insurance companies doing business in New Jersey use education and occupation as criteria for setting your auto insurance rates. The use of education and occupation to set auto rates is discriminatory and must be banned. Education and occupation serve as proxies for race and class, resulting in lower-income people and minorities being charged disproportionately higher rates. Education and occupation alone can impact your rate quote regardless of your driving record.
NJCA's Report documents the discriminatory price impact of GEICO's use of education and occupation in determining consumer auto insurance rates.
NJCA obtained over 400 rate quotes from GEICO's well-publicized website and compared rate quotes for consumers with different education and occupational status. The study illustrates that GEICO assigns people higher rates due to lower educational attainment and nonprofessional jobs.
Of the rate quotes analyzed, NJCA found that:
- The average rate quote for consumers without a Bachelors degree (consumers having a high school or vocational degree) is 19% higher than the average rate quote for consumers with a Bachelors degree (or higher educational degree);
- The average rate quote for consumers with a nonprofessional job is 27% higher than the average rate quote for consumers with a professional job;
- Some comparisons revealed that lower education level alone produced as much as a 61% higher price quote compared to someone with a college degree, even when all other factors stayed the same.
S-389/A-1953, introduced in the New Jersey State Legislature by Senators Nia Gill (D-34) and Joseph Vitale (D-19), would outlaw the use of education and occupation as rate-making and underwriting factors. Passage of S-389/A-1953 is a necessary step to ensuring that NJ consumers are not subject to the discriminatory use of education and occupation in determining rates.
For more information contact Eve Weissman at (856) 966-3091 or eve@njcitizenaction.org.
Hidden Auto Finance Markup
New Jersey car buyers have been charged tens of millions of dollars in undisclosed "finance markup charges" when they have financed their cars at automobile dealerships, according to findings highlighted in a new report released by NJCA. And the nation-wide practice of the markup has also led to a well-documented trend of discrimination against African-Americans and Hispanics in New Jersey.
NJCA has called on New Jersey State Attorney General Peter Harvey to investigate and propose corrective action to this unfair and discriminatory practice.
Read our press release, the full report "Hidden Auto Finance Markup: The Costs and Impact on New Jersey Consumers," and a summary sheet of the report.
Wheels in Motion Program
NJCA has an exciting new pilot program, Wheels in Motion, for young apprentices who need access to affordable cars and auto insurance.
By combining below-market rate auto loans, discounted auto insurance and financial education classes, Wheels in Motion will help young adults purchase cars to get them to their jobs.
Details in our press release and the Star-Ledger article, "'Wheels' Revs Up Young Mechanics".