Investigative report: minority neighbourhoods charged more for car insurance in some US regions
A massive investigation from the independent, public interest journalism group ProPublica has unearthed some staggering findings about how car insurance premiums are assessed in the United States. The investigation revealed data that showed an overwhelming bias against minority (non-caucasian)-dominant neighbourhoods in various regions of the country.
ProPublica focused on the states of California, Texas, Missouri, and Illinois. Although that doesn't directly address all areas of the US, most of the insurers that are being assessed in this study operate in the majority of the states, so it's more than reasonable to suspect that the information that ProPublica dug up could be applicable to those regions as well.
In order to equalize variables like age, gender, and accident history, the study was limited to focusing on 30-year-old women with a safe driving record. Over 100,000 premiums were used as case studies. The analysis factored in a three-year window of data in Illinois and a five-year window of data in California, Texas, and Missouri.
Every single state that was studied showed evidence of insurers charging noticeably higher premiums prices to communities that were predominantly comprised of minorities, even when the level of risk was approximately the same. Illinois—and particularly the city of Chicago—proved to be a particularly bad area in this regard. Of the 34 companies analyzed in that state, 33 were charging at least 10 per cent more to drivers in those minority-dominated neighbourhoods. Six of them had disparities of greater than 30 per cent.
For further insight into individual zip code areas that were studied during this investigation, you can consult ProPublica's "Your Premium vs. Your Risk" page, which allows you to type in a zip code and see a direct comparison for that area.