Car Insurance: Where Drivers Pay More in Minority Neighborhoods - Los Angeles | Consumer Reports

In a first-of-its-kind analysis, Consumer Reports and ProPublica find car insurance companies charge higher rates in some minority neighborhoods. In Los Angeles, Pernell Cox's payments are higher than what he'd pay in a similar white neighborhood.

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[MrLalasd]

I think the key is shop around. At the end of the day we are just a number to insurance companies so we should consider them as a number as well.

[tjs]

When I moved from a semi-affluent suburb of 90k people to a small agricultural town (5k people) my car insurance with the same company went up nearly $400 a year. I was told it was specifically because of the higher percentage of unlicensed and uninsured drivers in the area causing more accidents.

[RainbowGardens]

If I owned an insurance company, I would charge based on the claims filed and losses incurred in a given area. If there is more risk for me as a business owner to insure someone who lives close to an area where there have been many claims for losses, such as accidents, thefts, bodily injury, etc. it only makes business sense to charge more to insure people at a higher rate in that area, regardless of race. It is the job of the consumer to choose the insurer and is precisely why we have competition, to keep quality up and cost down.

[charlesleggett]

$400 a month here in Milwaukee. I'm a low risk driver too. Ridiculous !!!🤬

[Insurancepanda]

Insurance is risk management. Not a pre-payment plan and not a "we all pay the same" plan. If you are living in an area deemed high-risk then you should move.

[JeffKubel]

It doesn't take an insurance expert or data scientist to know that minority neighborhoods equal higher risk for insurance. Am I wrong?

[STEVE]

Did CU take creditworthiness into account in making "comparable" comparisons? This could possibly be the reason for the disparity.

[disneyfan]

I think they should Charge more in bad areas.

[Rielestkid]

Snowflakes hitting the dislike button because this report actually makes you stop and think for a few seconds.

[getrealordie]

CR didn't do their homework on this one. It's not a political issue. It's about predicted risks: risks of accidents by driver and others, risks of theft and vandalism and also risks of unpaid premiums. Companies want to make money, they do not care about race unless it affects their finance. Facts that are politically incorrect (asian drivers, etc ) will show up in numbers. A young asian driver with no accident history has a higher risk than an affluent married man in their 40's with a history of several accidents. Of course, statistical models are not perfect knowledge. There are always many exceptions. Anyway, premiums are proportional to the risks of driver and area. If you mess with the system, you will end up creating free riders and inefficiencies. I know it doesn't sound fair, but as a data scientist, I don't see another way.

[Pattayaman]

The solution is gas tax. Pool the funds and use it to insure all drivers. No fault insurance.