Assemblyman Neil M. Cohen

COHEN BILL WOULD PREVENT AUTO INSURERS FROM USING EDUCATION, OCCUPATION IN RATE SETTING

(TRENTON) - Assembly Deputy Speaker Neil M. Cohen has introduced legislation that would prevent a person's education level and profession from being used as risk factors in auto insurance underwriting in New Jersey.

For Release:
March 7, 2006

Contact:
Assemblyman Cohen
(908) 624-0880
James Sverapa IV
(609) 292-7065

COHEN BILL WOULD PREVENT AUTO INSURERS FROM USING EDUCATION, OCCUPATION IN RATE SETTING

(TRENTON) - Assembly Deputy Speaker Neil M. Cohen has introduced legislation that would prevent a person's education level and profession from being used as risk factors in auto insurance underwriting in New Jersey.

The bill was crafted in response to recent published reports that found GEICO was using people's level of education and profession as a means of setting prices for insuring motorists.

"I found out about this practice the same way everyone in New Jersey did - by reading the newspaper," said Cohen (D-Union), chairman of the Assembly Financial Institutions and Insurance Committee. "And just like everyone else, I was outraged. How does what a person does for a living or where they went to school have any bearing on what kind of driver they are? Using that information to affect what insurance rates motorists receive is discriminatory and should be halted immediately."

The Cohen measure (A-2819) would prohibit automobile insurers from assigning less favorable insurance pricing to drivers based on their education level and/or employment, trade, business, occupation, or profession. The legislation would also prevent insurers from requiring any educational or occupational information as a condition of continued coverage or as part of an application for coverage. According to Cohen, the insurance industry cannot be trusted with this information.

"Unless someone can show me mountains of evidence to the contrary, I continue to maintain that this specific practice is discriminatory," said Cohen. "You can't expect me to believe that there is a significant difference in the driving abilities of someone who went to Boise State versus someone who went to Princeton. If this criteria was used in any other statute it would be immediately struck down as unconstitutional."

"Does this type of price setting mean that a person who can no longer afford college suddenly becomes a greater insurance risk?" said Cohen. "Does this mean that someone who quits college to support their family should be penalized? Does this mean that someone who leaves a GEICO-defined "good" job to have a baby or to raise their children is charged more for their choice? Does this mean that someone who is laid off or is otherwise unemployed should be forced to pay more for the same insurance coverage? Most people would agree, the answer is no."

"However, we should be mindful that we do not undo much of the good done under the Automobile Insurance Competition and Choice Act in our effort to protect the public as we move forward with this legislation," said Cohen. "I have no intention of reopening the Pandora's box of problems that caused so many insurers to leave the state in the 80's and 90's, citing issues with overregulation. But, when there is an obvious unfairness, we must address it immediately.�

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