Page 1 of 5 123 ... LastLast
Results 1 to 10 of 41
Thanks Tree16Thanks

Thread: Higher Auto Ins. Rates In Minority Neighborhoods

  1. #1
    Little Old Lady Madeline's Avatar
    Joined
    Jun 2014
    Posts
    43,164
    Thanks
    26768

    From
    Cleveland, Ohio

    Higher Auto Ins. Rates In Minority Neighborhoods

    *Snip*

    For decades, auto insurers have been observed to charge higher average premiums to drivers living in predominantly minority urban neighborhoods than to drivers with similar safety records living in majority white neighborhoods. Insurers have long defended their pricing by saying that the risk of accidents is greater in those neighborhoods, even for motorists who have never had one.

    But a first-of-its-kind analysis by ProPublica and Consumer Reports, which examined auto insurance premiums and payouts in California, Illinois, Texas, and Missouri, has found that many of the disparities in auto insurance prices between minority and white neighborhoods are wider than differences in risk can explain. In some cases, insurers such as Allstate, Geico, and Liberty Mutual were charging premiums that were on average 30 percent higher in zip codes where most residents are minorities than in whiter neighborhoods with similar accident costs. (Read a full description of the methodology.)

    *Snip*

    Our findings document what consumer advocates have long suspected: Despite laws in almost every state banning discriminatory rate setting, some minority neighborhoods pay higher auto insurance premiums than do white areas with similar payouts on claims. This disparity may amount to a subtler form of redlining, a term that traditionally refers to denial of services or products to minority areas. And, since minorities tend to lag behind whites in income, they may be hard-pressed to afford the higher payments.

    Rachel Goodman, staff attorney in the American Civil Liberties Union’s racial justice program, said ProPublica’s findings are distressingly familiar. “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,” she said.

    “We already know that zip code matters far too much in our segregated society,” Goodman said. “It is dispiriting to see that, in addition to limiting economic opportunity, living in the wrong zip code can mean that you pay more for car insurance regardless of whether you and your neighbors are safe drivers.”

    The Insurance Information Institute, a trade group representing many insurers, contested ProPublica’s findings. “Insurance companies do not collect any information regarding the race or ethnicity of the people they sell policies to. They do not discriminate on the basis of race,” said James Lynch, chief actuary of the institute.


    [Note: what bullshit. The insurance companies are the most meticulous about collecting metadata. They know more about the ethnicity of your neighbors than you do.]

    The impact of the disparity in insurance prices can be devastating, a roadblock to upward mobility or even getting by. Auto insurance coverage is required by law in almost all states. If a driver can’t pay for insurance, she can face fines for driving without insurance, have her license suspended, and eventually end up in jail for driving with a suspended license. Higher prices also increase the burden on those least able to bear it, forcing low-income consumers to opt for cheaper fly-by-night providers, or forgo other necessities to pay their car insurance bills.

    *Snip*

    Otis Nash works six days a week at two jobs, as a security guard and a pest control technician, but still struggles to make the $190.69 monthly Geico car insurance payment for his 2012 Honda Civic LX.

    “I’m on the edge of homelessness,” said Nash, a 26-year-old Chicagoan who supports his wife and 7-year-old daughter. But “without a car, I can’t get to work, and then I can’t pay my rent.”

    Across town, Ryan Hedges has a similar insurance policy with Geico. Both drivers receive a good-driver discount from the company.

    Yet Hedges, who is a 34-year-old advertising executive, pays only $54.67 a month to insure his 2015 Audi Q5 Quattro sports utility vehicle. Nash pays almost four times as much as Hedges even though Nash’s run-down neighborhood, East Garfield Park, with its vacant lots and high crime rate, is actually safer from an auto insurance perspective than Hedges’ fancier Lake View neighborhood near Wrigley Field.

    On average, from 2012 through 2014, Illinois insurers paid out 20 percent less for bodily injury and property damage claims in Nash’s predominantly minority zip code than in Hedges’ largely white one, according to data collected by the state’s insurance commission. But Nash pays 51 percent more for that portion of his coverage than Hedges does.

    *Snip*
    Higher Car Insurance Rates in Some Minority Neighborhoods - Consumer Reports

    Bastards.

    Your thoughts?
    Thanks from OHjulie

  2. #2
    Little Old Lady Madeline's Avatar
    Joined
    Jun 2014
    Posts
    43,164
    Thanks
    26768

    From
    Cleveland, Ohio
    What can you do, if this affects you?

    * It affects us all. Disturb your state's department of insurance and complain. You can find that data on this website:

    State Map

    * Buy a car with a history of fewer thefts and other losses. Check here, among other sites:

    https://www.nerdwallet.com/blog/insu...car-insurance/

    * Do not loan your car to anyone. Use care when driving and parking. Absolutely never drive after using any intoxicant. Do NOT loan you car to your teenager. If they take it without permission, treat it as the serious assault on the family's financial well-being that it is.

    * Off-street parking at home and garage parking at home, as well as monitored lot parking at work will reduce your rates.

    * Do not use your car for work. Consider offers to drive for Uber, etc. very carefully before proceeding.

    * If you drive in congested traffic daily, consider a dash-cam to allow you to successfully contest tickets or accidents.

    * Do not accept and pay driving or parking tickets without considering whether you can successfully contest them.

    * Buy home or renter's insurance, and other auto insurance, from the same company.

    * Review the available rates in your area every 6 months to a year, and look at all companies. Time consuming, but necessary.

    * Never allow your auto insurance to lapse.

    * Do not raise your deductibles for liability, collision, etc. unless you have the dough saved to pay those deductibles. If you fail to make repairs to a new-ish car because you cannot afford it, the subsequent years' insurance rates will be higher.

    Don't yell at your insurance agent; he or she is not setting rates. That takes place at the company, and they are not going to negotiate. If you feel your neighborhood has been targeted by serveral companies (which is exceedingly likely), take the matter up as a political issue, and make noise at your state's government.

  3. #3
    Established Member
    Joined
    Jan 2014
    Posts
    7,644
    Thanks
    2191

    From
    California
    Quote Originally Posted by Madeline View Post
    Ms. Madeline,

    A couple of things. The comparison between Mr. Nash's and Mr. Hedges' insurance is not really valid, as they don't bring a lot of things into perspective. Undoubtedly, Mr. Hedges has a better credit rating. That would bring down his rate. Perhaps Mr. Hedges bundles his insurance policy with his homeowners, and Mr. Nash does not. That would bring down Mr. Hedges rate. Hondas top the list of cars that are stolen, whereas Audis generally are the least likely to be stolen.

    I also glossed over on the first read, that Mr. Nash is only 26 whereas Mr. Hedges is over 30. That makes a huge difference in auto insurance rates.

    Second, the first part is just liberal hand wringing, stating that drivers with similar driving records get charged more in low income minority neighborhoods, than those in wealthier white neighborhoods. Remove the words "minority" and "white" from that statement, and you would say "well duh, there is more crime, more uninsured drivers, less home owners, people have lower credit ratings, etc. in poorer neighborhoods, than more wealthier ones."

    Basically, this is just race baiting disguised as "social justice."
    Last edited by Kallie Knoetze; 6th April 2017 at 11:00 AM.

  4. #4
    Veteran Member
    Joined
    Jul 2014
    Posts
    14,259
    Thanks
    4278

    From
    midwest
    Quote Originally Posted by Kallie Knoetze View Post
    Ms. Madeline,

    A couple of things. The comparison between Mr. Nash's and Mr. Hedges' insurance is not really valid, as they don't bring a lot of things into perspective. Undoubtedly, Mr. Hedges has a better credit rating. That would bring down his rate. Perhaps Mr. Hedges bundles his insurance policy with his homeowners, and Mr. Nash does not. That would bring down Mr. Hedges rate. Hondas top the list of cars that are stolen, whereas Audis generally are the least likely to be stolen.

    Second, the first part is just liberal hand wringing, stating that drivers with similar driving records get charged more in low income minority neighborhoods, than those in wealthier white neighborhoods. Remove the words "minority" and "white" from that statement, and you would say "well duh, there is more crime, more uninsured drivers, less home owners, people have lower credit ratings, etc. in poorer neighborhoods, than more wealthier ones."

    Basically, this is just race baiting disguised as "social justice."
    A friend of mine told me that her auto insurance rates went down several hundred dollars because she moved to another county.

    Her rates were affected by the auto claims for wrecks, thefts...etc. in the county.

    She moved from a county with a large city with lots of inner city crime, into the next county with small rural towns.

  5. #5
    Established Member
    Joined
    Jan 2014
    Posts
    7,644
    Thanks
    2191

    From
    California
    Quote Originally Posted by Miller47 View Post
    A friend of mine told me that her auto insurance rates went down several hundred dollars because she moved to another county.

    Her rates were affected by the auto claims for wrecks, thefts...etc. in the county.

    She moved from a county with a large city with lots of inner city crime, into the next county with small rural towns.
    Mr. Miller,

    Exactly, it's not you the insurance companies have concerns about, it's all those other drivers who share the road with you.

  6. #6
    Veteran Member cpicturetaker12's Avatar
    Joined
    Jul 2015
    Posts
    15,214
    Thanks
    12047

    From
    Florida
    Quote Originally Posted by Madeline View Post
    So are VEGETABLES and FRUITS if you can even find them! Everything is more expensive in minority neighborhoods. Ironic huh?? I watched one of those 'telling' interviews some years back when a inner city was trying to get some dirt set aside for a vegetable garden. One of the woman organizers said she "could walk down the street and get a gun faster than she could get a tomato." That's always stuck in my mind.
    Thanks from Madeline

  7. #7
    Little Old Lady Madeline's Avatar
    Joined
    Jun 2014
    Posts
    43,164
    Thanks
    26768

    From
    Cleveland, Ohio
    Quote Originally Posted by Miller47 View Post
    A friend of mine told me that her auto insurance rates went down several hundred dollars because she moved to another county.

    Her rates were affected by the auto claims for wrecks, thefts...etc. in the county.

    She moved from a county with a large city with lots of inner city crime, into the next county with small rural towns.
    That's a legitimate part of rate-making, but it does not account for the entire disparity between mostly white and mostly minority neighborhoods.

    The entire article I linked in the Op is worth reading. Written by Consumer Reports, it allows you to test your rates by zip code in California and the 3 other states they studied.

  8. #8
    Veteran Member Spookycolt's Avatar
    Joined
    May 2012
    Posts
    43,232
    Thanks
    8208

    After reading their methodology you have to say this report is inconclusive.

    Only 4 states collect the data they used for this report meaning there are 46 states (the vast majority) which we have no idea about.

    Only using 4 states is not enough information to garner any concrete analysis because any number of other causes may be able to explain this disparity.

  9. #9
    Veteran Member Spookycolt's Avatar
    Joined
    May 2012
    Posts
    43,232
    Thanks
    8208

    Quote Originally Posted by cpicturetaker12 View Post
    So are VEGETABLES and FRUITS if you can even find them! Everything is more expensive in minority neighborhoods. Ironic huh?? I watched one of those 'telling' interviews some years back when a inner city was trying to get some dirt set aside for a vegetable garden. One of the woman organizers said she "could walk down the street and get a gun faster than she could get a tomato." That's always stuck in my mind.
    Actually that's not what they were looking at.

    They looked at many different factors from age to sex to race and even religion. They settled on "high risk" neighborhoods for their breakdown but fail to mention what that "risk" is. Car theft, vandalism, moving violations, accidents.....we have no idea.

    They are lacking quite a bit of information here.

  10. #10
    Veteran Member
    Joined
    Jul 2014
    Posts
    14,259
    Thanks
    4278

    From
    midwest
    Quote Originally Posted by Madeline View Post
    That's a legitimate part of rate-making, but it does not account for the entire disparity between mostly white and mostly minority neighborhoods.

    The entire article I linked in the Op is worth reading. Written by Consumer Reports, it allows you to test your rates by zip code in California and the 3 other states they studied.
    Racism is not at fault.

    Frequency of crime, auto theft, accident rates, lots of factors are involved.
    Thanks from Southern Dad and pragmatic

Page 1 of 5 123 ... LastLast

Similar Threads

  1. Replies: 2
    Last Post: 18th March 2017, 09:31 AM
  2. Replies: 36
    Last Post: 6th June 2016, 04:56 PM
  3. Replies: 0
    Last Post: 5th June 2016, 06:30 AM
  4. Replies: 12
    Last Post: 12th March 2015, 03:30 PM
  5. Rick Santelli: Interest Rates Are Moving Higher
    By michaelr in forum Economics
    Replies: 13
    Last Post: 31st May 2013, 11:16 AM

Tags for this Thread


Facebook Twitter RSS Feed