The Star-Ledger

Groups Say Auto Insurers Discriminate In Setting Rates

The Star-Ledger — Wednesday, February 28, 2007

Contributed by Joe Donohue

A coalition of civil rights, consumer groups and unions said today that Geico and 10 other auto insurance groups are systematically discriminating against minority and blue collar workers by basing their rates on either occupation, education or both.

In urging passage of a pending legislative ban on the practice, the group unveiled a study of 449 rating examples that concluded drivers with at least a bachelor's degree and a professional job receive an average discount of 38 percent from Geico.

"This is a sophisticated way of redlining,'' said Dick Barber, treasurer of the New Jersey NAACP. "The data clearly shows it. Any way you cut it, it's discriminatory.''

Rynthia Rost, a Geico vice president, questioned the validity of the analysis by New Jersey Citizen Action and blamed angry competitors for trying to derail its efforts to gain market share.

Geico insures 616,235 vehicles and ranks third largest in the state less than three years after it returned after a 28-year absence.

"If Geico was charging unfair rates, drivers would be flocking to our competitors and Geico would be shrinking, not growing in New Jersey,'' she said. "The simple fact is that Geico's education and occupational groupings are based on decades of data that show that people in some occupations or educational groups are less likely to have losses."

The Senate Commerce Committee on Monday will consider a bill (S-1714) that would ban the use of occupation or education for either rate-setting or underwriting. Jaimee Gilmartin, spokeswoman for the Department of Banking and Insurance, said department officials have "serious reservations" about the bill because they think its scope is too broad, but they plan to carefully review Citizen Action's analysis and meet with concerned groups.

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