NEW YORK – Black Americans pay over $1,300 per year more for car insurance than white Americans according to a newly released report from 4AutoInsuranceQuote.com, a car insurance quote provider based in New York City.
Titled "White Privilege in Auto Insurance," the new report is based current research by the Consumer Federation of America that compared auto insurance quotes from the five largest car insurance companies in the U.S.
"What they found was that good drivers in black communities paid more for auto insurance than good drivers in white communities, even when things like income and population density remained the same," the new report says, adding that in order to compare prices for white and black neighborhoods, the Consumer Federation created a fake driver profile.
The fictional person was a 30-year old single woman with a "fair" credit rating, a clean record, no policy lapses, a good job and a rental apartment. The "woman" used addresses in both predominantly black and white neighborhoods to get quotes for basic, state-minimum auto insurance policies.
"The results were sadly as expected. On average, the hypothetical black female was to pay considerably more for auto insurance than the hypothetical white female," a press release announcing the findings said.
"To be precise, if your neighborhood is 75% black or higher, you can expect to pay 70% more for auto insurance. According to the study, the fictional white woman would supposedly pay just $622 annually for auto insurance. The fictional black woman would pay $1,060 annually."
When the Consumer Federation compared middle-class white and black neighborhoods with the same income range, the black residents paid $2,113 a year on average, compared to $717 per person in the white middle class neighborhoods.
"This difference – over $1300 annually – not only is staggering, it's sad," says the new report.
“These findings suggest a troubling pattern of high rates in African American communities regardless of driver history,” said Tom Feltner, Director of Financial Services at the Consumer Federation of America. “We are not rushing to judgment about why this happens, but it is urgent that regulators, lawmakers, and the industry take a hard look at these findings and address the impact of high auto insurance prices on drivers living in predominantly African American communities.”
The CFA data also revealed:
- Across the country, Progressive’s and Farmers Insurance’s good driver premiums show the most disparity between predominantly African American and predominantly white ZIP codes, with both companies averaging 92%. State Farm, Allstate and GEICO also charge substantially more — 62, 56, and 52 percent respectively.
- In several metropolitan regions around the country, including Baltimore, New York, Louisville, Washington, Detroit, Boston, and Orlando, the disparity of premiums is more than 50% between predominantly African American and predominantly white ZIP codes.
• Ever run up against anger from someone who complains that they are being quoted a higher rate because of their race? If so, how do you respond? Please comment on this thread: “White Privilege” in Auto Insurance
About 4AutoInsuranceQuote.com: 4AutoInsuranceQuote.com is a car insurance quote provider located in Manhattan, New York. Founded in early 2008, 4AutoInsuranceQuote has since provided more than one million free car insurance quotes to its customers. Please visit http://www.4autoinsurancequote.com for more information.
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