Car Insurance: Where Drivers Pay More in Minority Neighborhoods - Chicago | 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 Chicago, Otis Nash's payments are higher than what he'd pay in a similar white neighborhood.

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[elaizon]

35. Been driving since I was 18. No accidents, no dui's, nothing. 190$ a month to e-surance.

[keviinkins]

Awesome work CR, we need more videos like this.

[gbaran]

Credit Score! Your rate is based on your credit score. I find it suspect there was no mention of credit score. If you are familiar with Propublica, most of their reports starts with a premise and then they attempt to build a narrative that supports that premise.

[fatboy]

I have been with Geico for a long time. I have Zero points on my license and I am over 50 years old. In PG county MD just outside of Washington DC ( the most affluent black community in the country) I was paying and already high $2400 a year for a 2013 BRZ and a 2001 Jeep Cherokee ( liability and theft only on the Cherokee). I am now in NW Baltimore ( largely African American neighborhood). My rate is $3000 per year. When I move to Howard county Marryland ( mostly upper income caucasians) I expiate my rate to drop over $1000 a year.

I also expect my water bill will halve. In Howard county I do not think I will get a bill for $1900 to fix a public road. If you wonder why so many homes are boarded up in poor neighborhoods. Imagine your home is paid off and you are just making it and the city sends you a bill for $1900. If it is not paid in a timely fashion the City owns your home. It is a shame because Baltimore is such an inexpensive place to live otherwise with fine dinning and plenty to do.

[IansTech]

Car insurance is a crooked industry period.

[leightonmann]

“These results fit within a pattern that we see all too often—racial disparities allegedly result from differences in risk, but that justification falls apart when we drill down into the data, ”

[princeplanet]

I can see how collision and personal property would be higher in high crime areas. However liability should not be affected by the neighborhood. Liability is for damage your car has done to others. So if the insurance is looking at only personal variables; liability-only insurance should cost the same, regardless of neighborhood. If this is not the case, then there is an issue,

[StreetersGarage]

not a true comparison. You have a 20 year age difference between the drivers and different cars. one of which is a Civic which is one of the more stolen cars. Give us the same drivers and cars in 2 different zip codes and see what the difference is.

[fraxonthefurry]

I live in Portland TN, a small town lots of farms and I pay 185 a month from farm bureau.

[FooBarr]

There is one variable that CR did not address: home ownership. It is a fact that bundling home insurance with auto will save you a bunch, even from the same insurance company. That would make the average rate higher in a Zip Code where fewer people own homes instead of renting, even with the insurer's payouts the same.

For CR to compare rates fairly, they would have to compare rates directly between homeowners who bundled in the different Zip Codes, and renters who are paying separately for car insurance in the different Zip Codes.

[alexsu]

18 in Ontario who is secondary driver on the policy pays 440 CAD dollars per month with minimum coverage

[whechi]

they also measure rates by estimates of uninsured drivers which is measurable by vehicles registered by insured.

[andrewnprice]

Okay just to address some of the misconceptions I have seen in the comments. First off they didn't compare these specific drivers. They used them as examples. Their data is based on them running 30 million different insurance quotes on 4 different profiles (of which one of a 30 year old female teacher with no driving records issues was used for comparison) in the states mentioned. Beyond the zip code the details of the applicants were the same. Same car, credit score, age, income, etc. Secondly they were not charging minorities more, they were charging people that live in predominantly minority neighborhoods more. This is all included in the methodology section of the report.

[TechGamesAU]

This is a very weak case presented by consumer reports. Of course insurance costs more in areas of frequent crime, and affluence correlates with crime rates, so of course 'minority' areas (aka poor areas) will have higher insurance rates...

[sheem.]

No wonder why my insurance is so high! I live in the Bronx! lol damn. I was getting quotes of over $400... smh.

[vampire]

I find it funny some of the comments saying if you have driven longer than they should be paying lower rates. I have driven less years than these two (I am younger) and I pay less than these two per month. No I don't have bare bone coverage. Since I am still paying for my vehicle I am force to buy other coverages to satisfy my bank. I never been in an accident. I have excellent credit score and pay $72.00 per month. I shop around until I find the lowest rate possible.

[thisisurcapt]

I wonder how people would react to car insurance working like Obamacare? not based on risk (no preexisting), but partially based on your income.

[lisam]

State regulators need to do their jobs. Anymore it seems like insurance companies can do whatever they want to get more money. The only things that should count are driving record, and car details. Companies can use your age, credit rating, education level, and just about anything else to justify charging more., some will even add a charge if you are in an accident that wasn't your fault. They are all the same so we are stuck.

[krukar]

Does this report indicate that Consumer Reports will sway its results to account for social fairness?

[banstaman]

There certainly is more risk in poorer neighborhoods. The key is variance and from people with stable lives, there is low variance, so insurance companies receive more consistent data and can reliably estimate how much it costs them if they were to get into an accident. In poorer neighborhoods you'll notice they live very unstable lives, there is more crime, vandalism, vehicular theft, which is greater risk and thus they would have to charge more as those circumstances are more expensive to cover and there is no clear pattern to judge-reliably on how much it would risk them. There is also the supply and demand aspect to be aware of; in poor neighborhoods, they don't have cars and thus the demand is too low to be able to make insurance cheap whereas in areas where they can afford cars, there is solid-enough-demand. Lastly, many in poor neighborhoods tend to under-insure or drive without insurance altogether; which strains insurance companies; so to make up for their losses, then they would have to charge more whereas higher class families/drivers tend to over-insure or insure at the adequate amount; so the insurance company doesn't have to gouge it's new customers.