Study Finds Poorer New Jersey Cities Pay Higher Car Insurance

Consumer group leader claims practice is unfair

SBWire — Wednesday, May 1, 2013

San Francisco, CA — The price one pays for insurance is naturally linked to the zipcode one lives in, and a new survey is showing how much of a difference one's address can truly make.

The most striking result of the recently released analysis is of state data was created by California-based TZ Insurance Solutions LLC, expressing that residents of New Jersey's poorest cities are paying much higher prices than in other cities.

The rates for these areas comprise thousands of dollars more per year, as compared to those paid by residents of higher-income cities, according to the survey.

Regulators split the state into 49 rating territories, and found in the Montvale rating territory, which includes Franklin Lakes, West Wood, and Gergen County Zip Codes, a quote averaged $1,632. The numbers compiled were based upon standard policies written on various driver profiles.

For an address within the Passaic city, the average quote was more than $1,100 higher, averaging $2743 overall. Paterson residents pay almost as much, at $2,728 on the average.

The sizable disparity between the cities and the suburbs is not a new phenomenon, but it is "grossly unfair," according to Phyllis Salowe-Kaye, who is executive director of the consumer watchdog group of New Jersey Citizen Action.

"The urban communities keep getting socked and socked and socked," she said.

"In most states the people in the cities pay more," said J. Robert Hunter, director of insurance for the Consumer Federation of America in Washington, D.C. "It has a lot to do with traffic density but they really pile on to the poorer people," Hunter said.

The divers sometimes pay more based upon occupation or education, regardless of their active driving records. Insurers also look to credit scores and whether one owns a home in addition to age, marital status, claims history, and driving record.

The residents of Newark, East Orange, Passaic, Atlantic City, and Camden pay the highest fees. Those residing in Morristown, Whippany, and Caldwell pay the lowest amount. Teaneck sits almost directly on the average at $2,131 per year.

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