TRENTON, New Jersey — The New Jersey NAACP and two Latino advocacy groups filed a lawsuit Wednesday accusing state insurance regulators of enabling discrimination by allowing car insurers to use education and occupation as factors when setting rates. The groups allege these “income proxies” act as stand-ins for race and class, unfairly inflating premiums for Black, Latino, and low-income drivers.
“A person’s degree or job title should not determine what they pay to drive,” said state NAACP President Richard Smith, calling the practice “thinly veiled discrimination that keeps communities at a disadvantage.” The plaintiffs — the NAACP, Latino Action Network, and Latino Coalition of New Jersey — argue that regulators violated the state’s anti-discrimination laws and equal protection guarantees by sanctioning the practice. They are seeking a court ruling declaring the use of such proxies unconstitutional.
New Jersey’s Department of Banking and Insurance has previously defended the use of education and occupation as legitimate risk factors, citing a 2008 report that found no evidence of widespread premium hikes. However, a 2024 Consumer Reports study found lower-educated workers often paid more than their higher-educated counterparts. While five states, including California and New York, have banned such factors, similar reform efforts in New Jersey have repeatedly stalled in the Legislature.
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