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Consumer Reports: Drivers in minority areas pay more for car insurance

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A new investigation reveals drivers in some minority areas are paying significantly more for car insurance than can be explained by the risk. (WLS)

Car insurance premiums should be color-blind, but a new investigation by Consumer Reports and ProPublica reveals drivers in some minority areas are paying significantly more than can be explained by the risk.

What's more troubling, the exclusive analysis finds the practice could be happening across the country.

Otis Nash has lived in Chicago's mostly minority East Garfield Park neighborhood for his entire life.

"I feel like it's pretty much like anywhere else. You get some traffic in the morning, but that's anywhere because you have people going to school and going to work," Nash said.

Otis is rated a good driver and pays almost $200 a month for his Geico auto insurance policy.

Christopher Day is also rated as a good driver in Chicago. He lives 14 miles away in the Andersonville neighborhood but he pays around $115 a month for a Geico policy with more coverage for liability but less for comprehensive and collision.

It's a disparity Consumer Reports and ProPublica saw time and again.

"We looked at 34 different insurers in Illinois, and 33 of them had, on average, a difference between minority and non-minority neighborhoods of higher than 10 percent," ProPublica Senior Reporter Julia Angwin said.

The price disparity based on ZIP codes is not just happening here in Illinois. Three other states - Missouri, Texas and California - also provided data used in the investigation.

"I think we can say, based on these four states, is that it certainly raises questions about what's going on nationally," Angwin said.

Take California - Pernell Cox lives in the affluent, predominantly African-American neighborhood of View Park in Los Angeles.

The investigation found that a safe driver in View Park pays 13 percent more on average than one who lives in a white neighborhood of comparable risk.

"Learning that our community might be targeted for higher insurance rates than the risk is a reason for people to be angry," Cox said.

The California Department of Insurance criticized Consumer Reports' and ProPublica'sapproach. Liberty Mutual, the parent company of Safeco, said it is "committed to competitively priced car insurance options."

The Illinois Department of Insurance called the methodology "incomplete" and said it "does not tolerate discrimination."

Geico did not comment.

Meanwhile Otis, said he hopes rates become fairer, but for now Geico is among the cheaper insurance companies he could find in Chicago. But Pernell Cox shopped around in Los Angeles and found a $400 annual savings with a different insurer.

Car insurance rates can vary widely state by state - even neighborhood by neighborhood. Consumer Reports said if you haven't competitively shopped your policy in recent years, spending a few minutes doing so could save you a bundle.

All Consumer Reports material Copyright 2017 Consumer Reports, Inc. ALL RIGHTS RESERVED. Consumer Reports is a not-for-profit organization which accepts no advertising. It has no commercial relationship with any advertiser or sponsor on this site. For more information visit consumer.org
Related Topics:
automotiveinsurancecardrivingconsumer reportsdiscriminationinvestigationChicagoEast Garfield ParkAndersonvilleCaliforniaIllinois

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