For at least two decades, Cuqui Rivera of North Brunswick had been free of a car accident. She didn’t get a speeding ticket. Her only interaction with her car insurance company was to write them a check, which she did religiously. She was a model insurance driver.
Or at least she thought she was.
Then, a few years ago, Rivera heard insurance companies weigh things like credit scores, education and employment when deciding how much to charge and she decided to check it out.
When her policy was renewed, Rivera ditched Liberty Mutual and turned to CURE auto insurance, which the company and activists say is the only one in New Jersey that doesn’t factor these items into its rates. . Her annual bill for a car and the same coverage, she said, went from $2,997 to $1,188.
Rivera says she has a good idea why she’s been charged so much more for so many years.
“It’s because I (only) have a high school diploma,” Rivera said.
Most Jersey drivers in a state with more than 5.9 million vehicles might not know that the amount each pays for car insurance isn’t governed solely by their driving record or where they live. residence. Insurers also look at your credit score, what you do for a living, if you’re married, if you own a home, and if you have a college degree.
And these factors can have startling disparities, according to a 2015 study by Consumer Reports.
A janitor with a perfect driving record and terrible credit could actually pay $37 more a year for insurance than a doctor who was convicted of drunk driving but has excellent credit, according to the report. ‘study.
“We had a really hard time getting people to understand,” said Maura Collinsgru of New Jersey Citizen Action. “It’s very difficult for people to understand. It’s not like you get a detailed list, and if you did, I’m sure it would be quite enlightening.
A more recent study showed how rates are determined in New Jersey and most of the country discriminates against minorities.
Proponents of legislation that would ban the use of education, occupation, homeownership status, marital status, or credit score to determine insurance rates are cautiously optimistic that upcoming increases in rates for up to 1.2 million drivers with low levels of coverage will breathe new life into the bill, which has been dragging on for years in Trenton.
The New Jersey Insurance Board, a nonprofit group that represents auto insurers in the state, and the state Department of Banking and Insurance, which exercises regulatory oversight over insurers, recognize that companies use these parameters to determine rates. But to what extent is unknown since these are trade secrets.
Liberty Mutual, which had insured Rivera, said it “considers dozens of factors when determining a customer’s overall risk” and is “committed to providing drivers with insurance coverage options cars fair and at competitive prices”. But spokesman Gregory Kessler wouldn’t say how much they weigh on credit scores compared to other metrics, like education level and occupation.
Good government advocates say the current practice is discriminatory. Blacks and Hispanics in the state are more likely to rent instead of own a home, to be widowed, divorced or never married, to have a high school diploma or less and to work in a service occupation , according to a 2020 report from the Consumer Federation of America.
The debate about this has been raging for years in New Jersey. State Senator Nia Gill, D-Essex, sponsored legislation as early as 2006 to ban insurers from using these measures. She is the main sponsor of the current bill which has not yet been heard this year.
Only three states – California, Hawaii and Massachusetts – prohibit credit score as a factor. California, Massachusetts, Michigan and New York prohibit education and employment.
Rivera, a lifelong campaigner, never thought of switching carriers during all those years of paying more every month. Money that could have been better spent on his children and grandchildren. She was not alone.
According to the Consumer Federation of America report, majority-black ZIP codes pay 49.5% higher premiums than majority-white ZIP codes. Majority Latino ZIP codes pay 50% more and low-income ZIP codes pay 51.5% more than majority white.
“They have a really detrimental impact on consumers,” said Michael DeLong, research and advocacy associate for the group. “It just has a very big impact on black and Latino consumers.”
The group compared the rates of a 35-year-old driver with a clean record looking to insure a 2011 Honda Civic in 2020. It showed that people with excellent credit pay an average of $842 per year, compared to $1,384 for those with fair credit and $2,153 with bad credit. credit. A clean record with good credit versus a clean record with bad credit equals a 156% increase.
The Insurance Council of New Jersey defends the current practice and opposes the bill. Insurers say that overall, these factors predict the risk of motorist claims.
“The ICNJ has a view on the use of risk-based pricing variables and that is that we strongly support allowing their use,” said Christine O’Brien, group president.
“Insurance companies use a combination of many factors to ensure the best rate and ultimately premium for all drivers,” she said. “New Jersey legislation … which seeks to prohibit certain variables fails to recognize that these factors have been repeatedly determined to be actuarially justified, predictive of risk, and not unfairly discriminatory.”
But critics don’t buy it. Including CURE auto insurance CEO Eric Poe, who has long opposed the practice.
“If you’re wealthy and have more assets, you’ll get a better price,” Poe said. “The worst kind of racism is silent political racism.”
Poe said his company opted out of using education, occupation and credit scores after the state allowed insurers to do so about two decades ago.
The Consumer Federation of America’s 2020 report also showed big disparities by where drivers live. Fair credit to Princeton? The 35-year-old driver with a clean record looking to insure a 2011 Honda Civic could expect to shell out $1,200. Moving to Trenton? They would pay $1,851 and if they moved to Newark it would increase to $2,120. Bad credit in Newark? The cost jumps to $3,376.
Should drivers who live in densely populated cities who don’t park their cars in garages and who might be more prone to being swept away or robbed pay more? Of course, proponents of change agree.
“Density and your zip code would impact your car insurance premium. But the large price differences we’re seeing are far too large to be explained by that,” DeLong said. “Your location should have some impact, but these discrepancies are just too big.”
The cost of driving in New Jersey is rising.
Starting in January, up to 1.2 million drivers who have the current $15,000 liability coverage will have to pay more for the new $25,000 minimum coverage. Insurers say that’s about $125 more per year than these people will have to pay.
In 2026, the minimum coverage is expected to increase to $35,000.
More recently, legislation has been quietly introduced that would increase bodily injury coverage minimums to $50,000 from $15,000 under the existing law.
The added costs have some people sounding the alarm about a possible unintended consequence: more people on the road who simply don’t have insurance.
“Forty percent of the people who leave me are uninsured because they just can’t afford it anymore,” Poe said.
“It’s actually worse for everyone because it indirectly increases insurance costs,” DeLong said of fewer insured drivers on the road. “It only makes an already bad situation worse.”
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What if someone else is driving my vehicle at the time of the accident?
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The rules of “permissive driving” apply in such cases. The driver must drive your car with your consent and a valid driver’s license. This may interest you : Does car insurance cover hurricane damage? These are the coverages you need. According to the Indian car tariff, anyone can drive your car under the permitted laws. Therefore, do not worry before lending your car to your friends or family members.
Is it wrong to let someone else drive your car? Whether you are an uninsured, underinsured or insured driver, if someone gets into an accident while driving your vehicle, you could be put in a bad situation, so be careful and don’t let other people drive your vehicle. . Don’t let just anyone drive your car. Make sure he is a trustworthy driver and has a good driving record.
What happens if my boyfriend gets in an accident in my car?
If the person driving your car has their own auto insurance policy, their coverage can serve as secondary insurance for yours. However, it is an auto insurance myth that a non-owner driver is entirely at fault. To see also : Is my insurance void if I go over mileage?. Your own auto insurance would still be considered primary coverage.
Does NJ car insurance cover other drivers?
If you let someone borrow your car and they cause an accident in New Jersey, personal injury liability insurance pays for the injuries to the other driver and their passengers. See the article : What Factors Reduce Your Car Insurance?. Property damage liability insurance will pay for damage to the other driver’s car.
Does the insurance follow the car or driver to New Jersey? Auto insurance generally follows the car to New Jersey. The types of auto insurance that track the car in New Jersey are collision, uninsured motorist comprehensive coverage, and property damage liability.
Can someone drive my car if they are not on my insurance New Jersey?
Loaning your car to an uninsured driver in New Jersey Essentially, if you allow someone to drive your vehicle and they are involved in an accident, your auto insurance would be the primary coverage, but your friend’s auto insurance would serve as a secondary hedge, i.e. if they have a hedge.
How many European countries are covered by Peugeot?
Peugeot offers free travel between 40 European countries.
Can I buy a Peugeot in America?
Peugeot was the last French automaker to sell cars in the United States, but there have been no dealerships since the late 1980s. Citroën withdrew from the American market in 1974. The two French brands are relatively well established in Europe and South America, and Peugeots are even sold as far away as Mexico.
Are Peugeot cars still being made?
UPDATE 3/8/2021: As reported by Automotive News Europe, Stellantis has confirmed that it no longer plans to bring the French brand Peugeot back to the US market.
What happens if someone else is driving my car and gets in an accident NJ?
Your own auto insurance would still be considered primary coverage. For example, suppose another person driving your car causes a car accident. Since they were at fault in your car, your insurance is responsible for the damage.
Is the registered owner of a car liable for an accident in New Jersey?
The owner of the vehicle Sometimes the real owner of the car can be held responsible after a car accident even if he was not in the vehicle. This happens when the owner has been negligent in handing over his car to the dangerous driver.
Does insurance follow the car or driver in New Jersey?
Liability Laws in New Jersey New Jersey laws require drivers to carry personal injury protection insurance that will help cover medical expenses when someone is injured in an accident. This insurance can be used regardless of who is responsible, but this type of protection follows the driver, not the car.
Does my insurance cover others to drive my car?
Can I buy insurance for anyone to drive my car? An “all-driver” insurance policy allows anyone to drive your car at any time. There is no limit to the number of people who can drive the car, so any friends or family, who have your permission, are legally insured to drive it.
What happens if you drive around with no car insurance?
If you get caught without insurance, even if it’s your first offence, you could get a ticket and fines. Fines for driving without insurance can reach $5,000 in some states, including Massachusetts, New Jersey, West Virginia and Hawaii.
Can someone drive my car if they are not on my insurance UK?
It may be an emergency or you may have the car owner’s permission, but that doesn’t mean it’s legal. Unless you are a “designated driver” on their car insurance, you will almost certainly not be insured. And the driver and car owner can get in trouble if caught without the necessary coverage.
What happens if someone else is driving my car and gets in an accident without insurance UK?
Liability insurance does not cover uninsured drivers. If you want to make a claim for injury after being hit by an uninsured driver, you can file a claim with the MIB (Motor Insurance Bureau), which provides coverage for uninsured motorists.
What are the 3 types of auto coverage?
Types of auto insurance coverage
- Liability coverage. Protects you if you cause damage to others and/or their things. …
- Collision coverage. Covers your car if you hit another car, person, or stationary object (like those damn ornamental rocks Cousin Todd has at the end of his driveway). # …
- Full coverage.
What are the 4 types of coverage? The four types of insurance recommended by most financial experts are life, health, auto, and long-term disability.
What are the 4 basic coverages of the standard auto policy?
Although different states require different types of insurance and there are several additional options (such as gap insurance) available, most basic auto insurance policies include: bodily injury liability, bodily injury, property damage liability, collision, comprehensive coverage and uninsured/underinsured motorist.
What are 4 main types of automotive coverage insurance?
The most common types of car insurance coverage include liability, collision, personal injury protection, uninsured and underinsured motorist, full and medical payments.
Which types of insurance is are legally required?
Compulsory insurance is insurance that must be legally held in order to carry out an activity, such as car insurance and driving a car. Other types of mandatory insurance include workers’ compensation and professional liability insurance.
What insurance coverage is required by quizlet law? Automobile liability insurance is required in virtually all states. What is bodily injury cover? This is the part of liability coverage that insures you against injuries you cause to others in a car accident. It consists of two digits.
What type of insurances are mandatory?
Minimum auto insurance limits in every state With the exception of Florida, every state requires bodily injury liability (BI) insurance, while all 50 states plus Washington, D.C. require property damage liability (PD) ). About half of the states require some type of uninsured/underinsured motorist (UIM) insurance.
What are 3 examples of mandatory insurance in the US?
For businesses, the compulsory insurance network is much wider: insurance policies such as workers’ compensation, general liability, specialist liability cover, automobile cover and theft insurance employees are the most common types required for business enterprises.
What type of insurance is mandatory in some states?
Liability Insurance: Almost all states require a minimum amount of liability insurance. This coverage helps pay for injuries or damages you cause in a car accident, including those to the other driver and their passengers.
What’s the most common type of insurance that states require?
Liability Insurance: Almost all states require a minimum amount of liability insurance. This coverage helps pay for injuries or damages you cause in a car accident, including those to the other driver and their passengers.
How many P&C insurance companies are there in Canada?
Approximately 192 private P&C insurance companies compete in the automobile insurance industry in Canada. In addition to these private insurers, government-owned insurers in British Columbia, Saskatchewan and Manitoba provide the mandatory component of auto insurance in those provinces and some optional coverage.
Is insurance a competitive market?
Because the insurance market is competitive, as companies become profitable, they begin to adopt more lenient underwriting criteria and lower their premiums to capture more market share. Other insurance companies react by adopting the same policies, to prevent their takeovers or to increase their market share.
How big is the Canadian insurance market?
| $81.1 billion | Property and casualty and direct insurance market size in Canada in 2022 |
|---|---|
| 2.8% | P&C Insurance and Direct Insurance in Canada Annualized Growth in Market Size 2017-2022 |
What are 3 examples of mandatory insurance in the US?
For businesses, the compulsory insurance network is much wider: insurance policies such as workers’ compensation, general liability, specialist liability cover, automobile cover and theft insurance employees are the most common types required for business enterprises.