Prohibits insurers from using credit history when evaluating homeowners insurance policies.
S4326 would prohibit insurers and insurance producers from using an applicant’s or insured’s credit history when evaluating homeowners insurance policies. The bill bars credit history from being used to deny, cancel, refuse to renew, or increase the premium on a homeowners policy, including charging a higher premium than would otherwise apply based in whole or in part on credit history.
The bill also forbids credit history from being used in several underwriting-related decisions, such as determining discounts, assigning rating tiers, placing an insured with an agent, or evaluating eligibility for certain payment plans. It takes effect 90 days after enactment and would amend and supplement Title 17 of the Revised Statutes.
The bill would change New Jersey insurance law by limiting underwriting practices for homeowners insurance and removing credit history as a permissible rating factor. Insurers would need to revise pricing models, discount structures, tiering systems, and payment-plan eligibility criteria to ensure they do not rely on credit-based insurance scores or related credit information for homeowners policies. Homeowners and applicants with weaker credit histories would be protected from premium increases or adverse policy decisions based on credit.
The bill’s stated purpose and framing are strongly consumer-protective, emphasizing fairness and equity for homeowners who may otherwise face higher premiums because of lower credit scores. Based on the bill text alone, the measure appears intended to benefit residents and reduce disparities in insurance pricing. No committee transcripts or recorded votes were provided, so there is no additional evidence of formal support or opposition in the available record.
The main policy tension is between consumer fairness and insurers’ use of credit-based insurance scores in underwriting. Supporters would likely argue that credit history is an unfair proxy that can raise costs for homeowners who are otherwise insurable, while insurers may contend that credit information is a useful actuarial tool for assessing risk and setting premiums. The bill specifically targets not only premium setting but also discounts, rating tiers, agent placement, and payment plans, which could broaden the operational impact and likely be a point of concern for the insurance industry.