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Bill

Bill

A 5096

Prohibits insurers from using credit history when evaluating homeowners insurance policies.

2026-2027 Regular Session

Prohibits using credit history to set homeowners insurance premiums, discounts, rating tiers, agent placement, and payment plans in New Jersey.

Introduced, Referred to Assembly Financial Institutions and Insurance Committee
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WeVote Research Nonpartisan
Bill Summary · A 5096

Overview

A 5096 (NJ, Session 222) would prohibit insurers and insurance producers from using an applicant’s or insured’s credit history when evaluating homeowners insurance policies. The bill aims to prevent credit-based factors from influencing premiums, discounts, rating tiers, agent assignments, or payment-plan eligibility. It takes effect 90 days after enactment.

Purpose and Intent

  • Eliminate the use of credit history in determining homeowners insurance premiums and related underwriting decisions.
  • Promote equitable access to homeowners coverage by reducing the potential for higher rates tied to credit scores.
  • Align homeowners insurance practices with consumer protection goals by limiting the reliance on credit-based insurance scores.

Key Provisions

1) Prohibitions on using credit history
- Insurers or insurance producers cannot deny, cancel, refuse to renew, or raise the premium of a homeowners policy, or charge a higher premium, based in whole or part on an insured’s or applicant’s credit history.
- Credit history cannot be used, in whole or in part, to determine risk level for:
- The provision or removal of a discount.
- Placement of an insured or applicant into a rating tier.
- Placement with a particular insurance agent.

2) Prohibition on using credit history for payment plans
- Credit history cannot be used to evaluate eligibility for payment plans.

3) Effective date
- The act becomes effective 90 days after enactment.

Who Is Affected

  • Individuals seeking or maintaining homeowners insurance in New Jersey.
  • Insurers and insurance producers operating in New Jersey.
  • Insurance agents involved in placing homeowners policies.

Practical Impact and Implications

  • Premiums: Expect premiums to be set without consideration of credit history, potentially reducing disparity for some high-credit-score applicants and limiting increases linked to low credit histories.
  • Underwriting: Rating practices for discounts, tier placement, and agent assignment cannot rely on credit-based scores.
  • Access and Equity: Aims to improve affordability and accessibility of homeowners insurance for residents who may have poor credit not reflective of insurance risk.

Procedural and Timeline Details

  • Introduction: Bill introduced May 14, 2026.
  • Committee: Referred to Assembly Financial Institutions and Insurance Committee.
  • Enactment Timing: 90 days after enactment to take effect (specific enactment date not provided in summary).

Summary

A 5096 seeks to remove credit history as a factor in determining homeowners insurance premiums, discounts, rating tiers, agent assignments, and payment-plan eligibility in New Jersey. The measure directs insurers and producers to base underwriting and pricing decisions on factors other than credit history, with a 90-day post-enactment effective date.

Compiled from official sources — confirm details with the bill’s official record.

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