Report: Minority Neighborhoods Face Much Higher Car Insurance Rates

It’s difficult for many people to find affordable car insurance. It might be even more difficult, however, for people living in minority neighborhoods.

A report published Wednesday by ProPublica and Consumer Reports found that people living in minority neighborhoods in the U.S. could be paying as much as 30 percent more for car insurance, according to the Chicago Tribune. But the report only analyzed data from four U.S. states, leaving some to question the its validity.

The study assessed insurance claims by zip code in California, Illinois, Missouri and Texas, as those were the only states where the data was available. In Illinois, the study found 33 of 34 insurance companies charged rates at least 10 percent more in predominantly minority areas. Moreover, six insurers in the state charged rates as high as 30 percent higher in minority zip codes.

More than half of insurers in Missouri and Texas charged rates at least 10 percent higher in minority areas, while the study found eight companies in California were charging higher insurance rates in similar areas.

Those disputing the report’s credibility note that insurers don’t collect information on race and ethnicity when selling policies.

“They’ve reached an inappropriate conclusion,” James Lynch, chief actuary of the Insurance Information Institute, said about the report, via the Chicago Tribune.

Insurance rates vary state to state, depending on a variety of factors for a given state, including laws. Common things insurance companies look for, however, include miles driven, accident history, credit scores, occupation, gender and age, according to the Tribune.

Thumbnail photo via Flickr/Pictures Of Money

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