N.J. Senate Panel Kills Bill to Ban Use of Education, Job in Rates

By | March 7, 2007

A bid to make it illegal for New Jersey auto insurers to use a driver’s job and education to decide rates failed Monday.

The Senate Commerce Committee voted against releasing a proposal to ban car insurers from weighing such factors.

The defeat came after a Gov. Jon S. Corzine’s administration and insurers argued the bill would impair competition and drive up rates after recent changes have helped bring more insurers to the state, which has the nation’s highest auto insurance rates.

“Competition is working for consumers and it will continue to work if reforms are allowed to progress,” said Hank Nayden, a Geico vice president.

The bill was sponsored by Sen. Nia Gill, the lone member of the five-member committee to support the proposal. She implored senators to at least release the bill so it could be debated on the Senate floor, but foes wouldn’t yield.

“We will hope that in some other form and maybe at some other time we’ll keep the fight alive,” said Gill, D-Essex.

Sen. Gerald Cardinale, R-Bergen, said it’s reasonable to use such factors when deciding rates and said the proposal would increase insurance costs for many drivers.

Sheila Kenny, of the state Department of Banking and Insurance, said it could roll back reforms that have helped make auto insurance more affordable and available.

“The New Jersey auto insurance market has improved dramatically,” Kenny said.

Monday’s debate came after New Jersey Citizen Action last week said it obtained 449 rate quotes from Geico’s Web site and found the average for those without a college degree was 19 percent higher than for those who have one, while the average for those with a blue collar-type job was 27 percent higher than those with a professional job.

Geico said job and education are among 25 factors it legitimately uses to decide rates.

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