Car insurance premiums higher in minority neighborhoods than in white areas with same risk

Source: Shutterstock
Source: Shutterstock

A new report found drivers living in minority neighborhoods pay more in car insurance premiums than those living in white areas, ProPublica reported.

ProPublica, in partnership with Consumer Reports, analyzed payouts and insurance premiums from Texas, Missouri, Illinois and California. It also examined about 100,000 premiums that were charged for liability insurance at each state for a period of three to five years.

Despite racial discrimination being against the law in many states, the report found people living in minority zip codes pay up to 30% higher in premiums than white zip codes even though they have the same risk. Robert Faturechi, ProPublica's money in politics reporter, pointed this out: 

The report found 33 out of 34 insurers in Illinois charged at least 10% more to customers in minority-populated areas than those living in a predominantly white neighborhood. For Missouri and Texas, half of car insurance providers charged higher premiums for safe drivers in "high-risk minority communities" than in low-risk white communities. In California, eight insurance providers have a 10% increase in prices for minority zip codes than in white zip codes.

According to ProPublica, 26-year-old Otis Nash pays a monthly payment of $190.69 for his Geico car insurance on his 2012 Honda Civic LX in Chicago. Just a few miles away, Ryan Hedges, 34, pays about $54.67 month for his Geico insurance for his 2015 Audi Q5 Quattro SUV. The main difference? Hedges lives in the swanky Lake View neighborhood adjacent to Wrigley Field, whereas Nash lives in East Garfield Park.

Hedges' and Nash's zip code was one of the main factors behind the more than the approximate $140 difference in car payments. According to data from ProPublica, drivers from minority neighborhoods are still quoted higher prices.

According to ProPublica, Illinois insurers paid 20% less in property damage and bodily injury between 2012 and 2014 in Nash's zip code than in Hedges' majority-white neighborhood. Despite this, Nash still has to pay 51% more for his car insurance than Hedges.

That takes a huge toll on Nash, who works two jobs as a pest control technician and security guards, for about six days a week in order to make his monthly car insurance payment. On top of that, he supports his 7-year-old daughter and wife. 

"I'm on the edge of homelessness," Nash told ProPublica, but "without a car, I can't get to work, and then I can't pay my rent."

Sadly, he's not alone.

How likely are you to make Mic your go-to news source?

Sarah A. Harvard

Sarah is a staff writer covering religion, race and politics. Her work has appeared in The Guardian, The Atlantic, Slate, The Huffington Post, TeenVogue, and VICE. Send tips and feedback: sharvard@mic.com

MORE FROM

FBI agent indicted in LaVoy Finicum shooting as police evade punishment for killing black people

Finicum was killed during the 2016 occupation of the Malheur National Wildlife Refuge.

Alton Sterling’s children sue Baton Rouge over shooting, alleging racism and excessive force

The Sterling family alleges that police officers sent racist text messages about people who protested the black man's shooting death.

3 Chicago officers charged with conspiracy in the shooting death of 17-year-old Laquan McDonald

The three Chicago police officers allegedly conspired to prevent an independent investigation and prosecution against Officer Jason Van Dyke.

Video shows officer threatening black man for jaywalking without an ID

The officer is not currently under investigation.

Black teens handcuffed for selling water on National Mall are now getting job offers

"I feel like it was a bad situation turned into a good situation."

3 of the Central Park 5 men just received honorary high school diplomas

All of the men in the Central Park Five will receive the diplomas they were denied after their wrongful convictions as teenagers.

FBI agent indicted in LaVoy Finicum shooting as police evade punishment for killing black people

Finicum was killed during the 2016 occupation of the Malheur National Wildlife Refuge.

Alton Sterling’s children sue Baton Rouge over shooting, alleging racism and excessive force

The Sterling family alleges that police officers sent racist text messages about people who protested the black man's shooting death.

3 Chicago officers charged with conspiracy in the shooting death of 17-year-old Laquan McDonald

The three Chicago police officers allegedly conspired to prevent an independent investigation and prosecution against Officer Jason Van Dyke.

Video shows officer threatening black man for jaywalking without an ID

The officer is not currently under investigation.

Black teens handcuffed for selling water on National Mall are now getting job offers

"I feel like it was a bad situation turned into a good situation."

3 of the Central Park 5 men just received honorary high school diplomas

All of the men in the Central Park Five will receive the diplomas they were denied after their wrongful convictions as teenagers.