© 2025 WWB Holdings, LLC. All rights reserved
November 16, 2025
The NAACP and Latino groups sued New Jersey regulators, alleging car insurers use education and occupation as proxies to raise rates for minority drivers. This file photo from February 2023 show a line of cars in traffic on southbound Route 73 in Mount Laurel.
The New Jersey NAACP and two Latino groups sued state insurance regulators Wednesday, alleging they improperly allowed insurers to use proxies for income and race when setting car insurance rates.
In their suit, the NAACP, Latino Action Network, and Latino Coalition of New Jersey argue that the use of income proxies like education and occupation allows insurers to skirt restrictions and raise rates for low-income and Black or Latino drivers, regardless of their actual risk.
SIGN UP HERE to get PhillyVoice's free newsletters delivered to your inbox
"A person's degree or job title should not determine what they pay to drive. These so-called risk factors are thinly veiled discrimination that keeps communities at a disadvantage," state NAACP President Richard Smith said in a statement.
Consumer advocacy groups have long sought to outlaw the use of income proxies in car insurance rate setting, though they've found little success nearly two decades into the fight.
Those groups argue factors like education and occupation raise insurance rates for good drivers who are low income, and investigations have shown car insurance rates are higher in neighborhoods with majority non-white populations, even when accident costs are similar.
The suit charges that by allowing insurers to consider occupation and education in rate-setting, regulators violated state anti-discrimination protections, constitutional equal protection guarantees, and state law barring discrimination in insurance rates.
They asked a judge to declare the use of income proxies in insurance rate setting unconstitutional.
"After decades of meetings and appeals without meaningful change, the courts are now the only path to accountability. This case challenges a system that punishes people for who they are instead of how they drive," said Alex Shalom, one of the plaintiffs' attorneys.
New Jersey's insurance regulators have long denied that the use of education and occupation data systematically boosts rates for residents with lower educational or occupational attainment, arguing those factors are simply among the many used to set rates.
In a 2008 report on the use of occupational and educational factors in car insurance, the state Department of Banking and Insurance found they had not pushed overall premiums higher for such consumers.
The report says rates proffered by Geico, which was then pioneering the practice in New Jersey, were often lower than rates of competing insurers who did not weigh a driver's occupation or education.
Higher accident and moving violation rates in dense urban areas, where Black and Latino New Jerseyans are likelier to live and where incomes tend to be lower, could explain part of the difference, according to the report.
Research from Consumer Reports Digital Lab found lower-ranked, lower-educated New Jersey workers typically paid more for car insurance than higher-ranked, higher-educated counterparts, though the trend did not always hold true.
Not all New Jersey car insurers inquire about a prospective customer's job or education levels.
At least five states — California, Georgia, Hawaii, Massachusetts, and New York — bar the use of educational and job attainment in car insurance rate setting.
New Jersey lawmakers have weighed outlawing the use of proxies like occupation and education, but those efforts have been hard fought and ended with the law unchanged.
In 2021, the Senate narrowly approved legislation that would have barred car insurers from using a customer's profession, education level, marital status, and credit score, among some other factors, in rate setting, but the bill did not advance in the Assembly.
Successor bills reintroduced in more recent legislative sessions have not moved at all.
Gary La Spisa, vice president of the Insurance Council of New Jersey, disputed the lawsuit's claims about how insurance companies set rates.
"We have been working for years to educate members of the Legislature on how these longstanding variables are used fairly by insurers seeking the most fair and accurate pricing for their consumers. Despite claims to the contrary, the variables have been studied over-and-over by insurance regulators and academic institutions who have repeatedly found that they are accurate, predictive of risk and used fairly," La Spisa said.
New Jersey Monitor is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. New Jersey Monitor maintains editorial independence. Contact Editor Terrence T. McDonald for questions: info@newjerseymonitor.com.
Nikita Biryukov, New Jersey Monitor

Government
Sponsored
Prevention
Books
Holiday
Eagles
Festivals
Finance
Men’s Health
Wellness
Illness
Utilities
Opera
Executive Orders
Adult Health
Health Insurance
© 2025 WWB Holdings, LLC. All rights reserved

source