A new car insurance industry analysis by virtual insurance agent Insurify reveals the industry’s systemic racism, according to an analysis by StreetsBlog. A close examination of pricing trends revealed that Black drivers with clean driving records receive higher prices than white drivers with spotty records, in addition to “other racist practices.”
The report states that “Cities and towns with majority Black residents experience among the highest quote prices compared to cities of any other racial makeup, regardless of how clean their driving record is.” It describes “redlining,” a practice in which drivers in “majority-Black neighborhoods” pay nearly “20 percent more for car insurance on average than a driver living in a majority-White neighborhood” with violations on their record.
As StreetsBlog notes, Congress has introduced legislation to prevent racist discrimination in the auto insurance industry. A new bill, “Prevent Auto Insurance Discrimination Study Act of 2020,” would conduct a study to identify “non-driving related underwriting factors used by private passenger automobile insurers and the extent to which each such underwriting factor impacts the final rate for an insured and an insured’s placement in an insurer’s various companies and rating tiers,” among other things.
The bill was introduced by Congresswoman Rashida Tlaib (MI-13), Congresswoman Bonnie Watson Coleman (NJ-12), and Congressman Mark Takano (CA-41). In a statement about the bill, Tlaib said: “Auto insurance discrimination on the basis of non-driving factors has allowed auto insurers to reap benefits off the financial struggles of so many Americans for far too long… Now, we have a pandemic exponentially exacerbating those financial struggles, with folks being forced to choose between paying for state-mandated auto insurance, keeping a roof over their heads, or food on the table through no fault of their own.”
Congressman Takano added: “The fact that minority neighborhoods pay higher car insurance premiums than predominantly-white areas once again highlights the systemic racism that is so deeply rooted in our country… My colleagues and I have come together to demand that the Government Accountability Office conduct studies of automobile insurance coverage so we can begin to address the problem at hand. If we want to create a more just, more equal country, we must not tolerate discrimination of any kind.” Their bill’s companion in the Senate was introduced last month by New Jersey Senator Cory Booker.