Shopping for car insurance can be an arduous task. Between sifting through quotes and picking the right coverage, car owners are often left more confused than when they started. This is probably because the process auto insurance companies use to determine insurance rates are also complex and possibly discriminatory. Concerns about being over charged are valid; fortunately there is a way for drivers to dig deeper without wasting time or resources. The Zebra is the fastest and most comprehensive website that allows customers to reach over 1,800 insurance products in an instant to compare quotes and choose coverage the smart way.
The proof
So, do car insurance companies really discriminate? Unfortunately certain studies concluded that this is true. Reports conducted by the Consumer Federation of American (CFA) and 4AutoInsuranceQuote.com found that African-American drivers paid a significantly higher rate than those in Caucasian communities regardless of their driving record or income.
The CFA analyzed data from the five largest auto insurance companies in various ZIP codes throughout the country. Taking into account income and population density, they also looked at premium disparities in a variety of different community types. They found that quoted premiums were 70 percent higherfor majority African-American communities than majority Caucasian communities.
Most notably, average premium disparity was largest in the upper-middle income range ($63,000-$102,000) for both community types. Upper middle class drivers in African-American communities were quoted an average of 194 percenthigher than predominantly upper middle class Caucasian neighborhoods, proving that the companies’ evaluate drivers less on their income and responsible driving habits, and more on existing socioeconomic factors.
A similar studyconducted by 4AutoInsuranceQuote.com surveyed 600 men from all different races, and their results also determined that African-Americans pay the most for auto insurance by a landslide.
What can you do?
While it may appear that car insurance companies are dictating premium pricing based on race, this information is never actually used when applying for coverage.
However, things like credit score, marital status, Crime and number of accidents in a certain area are contributing factors. Unfortunately, these socioeconomic elements may also display various signs of discrimination.Statistically speaking,African-Americans are more likely to be convicted of a crime, carry credit card debt, and have the lowest marriage rate of any racial group in the country.These troubling results represent an urgent need for lawmakers and the insurance industry to address the issues of discrimination, not just with auto insurance premiums, but the other socioeconomic issues that disproportionately affect the African-American community.
So, what can we do? On the consumer end, it is imperative that shoppers do their research.
Get a wider view of the market by reviewing prices from various insurance companies on websites like thezebra.com. The Zebra compares quotes from over 200 trusted insurance companies at once to provide customers a quick and simply way to obtain the best car insurance options based on their needs.
