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Report: Despite Stellar Driving Records and Good Credit, Drivers In Black Neighborhoods Pay More For Car Insurance

Driving while Black can not only lead to fatal police shootings, it can also lead to higher car insurance premiums, according to a recent report.

Insurify – an insurance shopping site that helps consumers compare car rates – found a stark difference in the rate drivers who reside in Black neighborhoods pay in comparison to those in white ones, Yahoo Finance reported.

Drivers who live in Black neighborhoods pay higher car insurance premiums than those living in white neighborhoods, according to a recent report. In this photo, writer and actor Dominique Purdy is on the set of Driving While Black. (Credit: Pexels/cottonbro)

One of the company’s data scientists, Kacie Saxer-Taulbee, said race should not be a factor in setting premium prices. However, other factors taken into consideration can sometimes lead to discrimination of a driver’s zip codes.

“They’re allowed to use other factors such as education level, employment, license status, and insurance history. These factors vary in majority-white, majority Hispanic, and majority Black neighborhoods to no fault of the drivers to set these rates, and those are the result of historically, discriminatory practice,” Saxer-Taulbee told Yahoo Finance.

Such factors can lead to a resident of a Black neighborhood with a stellar driving record paying 20 percent more than a resident in a white neighborhood with a poor one.

Insurify’s report also shows drivers who own their homes in Black neighborhoods pay 13 percent more than drivers who rent in white neighborhoods. The disparity is even higher when comparing credit.

A driver in a Black neighborhood with top-notch credit pays 24 percent more than a driver in a white neighborhood with bad credit.

This isn’t the first time such a study has been conducted. In 2017, ProPublica partnered with Consumer Reports to publish an in-depth article on the disparities in car insurance premiums between black and white neighborhoods.

After examining communities in Illinois, Texas, California and Missouri, ProPublica and Consumer Reports found that residents in poor black neighborhoods could pay as much as 30 percent higher than those in mid-to-upper-white ones. Risk of accidents didn’t have more bearing on whether those in white neighborhoods received a deep discount.

Rachel Goodman, a staff attorney in the American Civil Liberties Union’s racial justice program, told ProPublica it wasn’t surprising.

“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.”

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