Low-income or black? You may be paying more for auto insurance in the Bay Area
New data from the auto insurance comparison company, Gabi, shows higher prices for auto insurance in areas where there is a larger proportion of poor or black residents.
In the
Researchers controlled for crime rates and household income and used the same "dummy driver" to compare quotes across 14 of the largest insurance companies, keeping the type of car, age of the driver, driving history and other factors constant, said
"What was surprising for us was that we saw the percentage of
It's true that, holding all other factors equal, drivers in different locations may end up paying different prices for the same coverage, he said. But, those differences can be explained by the frequency and severity of past claims in the area that insurance companies have had to cover, he said.
"Different rates reflect the difference in exposure to loss and have nothing to do with race," Snyder said. "Insurance companies don't collect information on race, it would violate the law if we did, and we don't want it."
But,
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Auto insurance is mandatory in nearly every state and that puts the poor and people living in minority communities at a disadvantage, said Congressman
That's been a boon to Golden State motorists, who actually saw a decrease in auto insurance premiums in the first 25 years after the law went into effect, compared to an average 40 percent increase across the country, according to a 2013
But, more data is needed to fully understand where systemic biases are unfairly targeting some residents over others, Takano said. He introduced a bill earlier this year that would require insurance companies to report loss data by zip code in all 50 states. It also directs the Federal Insurance Office to analyze the loss data and submit a report to
"We aren't rushing to any conclusions, but I think we need to understand this better. We need to understand why this variation is happening," Takano said. "And what it will take to understand this is data."
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