The difference in cost between the white neighborhood and the minority neighborhood

“Car insurance costs more in minority neighborhood without higher risk. It sounds cruel but depending on which color your skin is, your car insurance will be calculated differently”

Investigating the variation insurance premium & payout within a population of a state, the reporter finds out a discrepancy of what insurance company charge among white drivers and their minority neighborhoods. The car insurance premium charge for a variety of reason. At first, the insurance broker will examine your personal background, your credit score, and your zip code!

How do the insurers explain?

Of course, the insurers excuse that it is all about different risks among different drivers. As they claim, the minority seems to file more crashes than the white drivers. The exact number they reply on is 30% higher for minority’s driver in filing a claim that the white neighborhood, in the same driving’s condition! Almost half (or more) of insurers in every state of U.S charged from 10% to 30% more to the customer in minority-populated areas which are defined as “high-risk minority communities” than those living in an absolute white neighborhood which is, of course, preferred as “low-risk” condition.


In insurer’s population (or racist?) belief, the race of a neighborhood partly determines the crime rate exists in this neighborhood! The insurer believes that the lower income or minority neighborhoods are often more likely to commit a crime than the higher class of white communities.

They also state that the higher risk rate is not the only factor that affects the higher premium in car insurance for the minority community. The other’s factors are based on the difference in living condition, career and the generation of vehicle. Indeed, there is an analysis of proof that the newer generation your vehicle is, the lower insurance fee you have to pay, counted in the insurer.

Is it fair analysis?

It raises a question that whether these differences are justice or just cruel excuses! When researchers do research at Los Angeles - a very wealthy community of the black and the result is still higher than compared with the lower and middles class of white suburb of Woodland Hills. It means if you are the minority and live in minority neighborhoods, you paid more. Not poor neighborhoods, just simply minority!

We all know that insurance calculator is depending on risk. The riskier place you live in, the higher insurance premium you going to pay for, simple as that. But the minority neighborhood doesn’t mean a dangerous-be-like place. Plenty of white neighborhoods show a much higher accident’s risk! It cannot be a reason for raising car insurance’s premium rate based on which race the drive is or where do they live in. The insurance company, of course, defend the claim and against accusations of racism. They might use numbers and statistic to excuse for their differences in car insurance policies. But they cannot cover it up for long. If you are worrying about whether your car insurance is justice or not, follow these steps to figure it out. First is comparing quotes from different insurance companies which is easily checked online.

Secondly, insurance’s liability coverage is regulated primarily by which state the driver live in and this also the place that driver can contact and question (or examine) about how fairness of your car insurance is! After all, the crucial solution is how to find a fairness in setting auto insurance’s policy!

However, in case that you aggressively want to make a comparison rather than question the differences, TheZebra.com is an online tool allowing you to estimates among available insurers (of the state you live in), and find the most affordable car insurance’ policy for you. The drivers can compare the rates often and suppose to choose the best fit for their own. The list of insurers by states can be found accurately in this link address!

After all, it is a complex topic with confounding variable. Obviously, there will be no insurance company admitted that they are applying a different insurance policy for a different race. But you can recognize it partly on how detail they can explain for their insurance policies. However, the more ethic the insurance company is, the more careful their car’s insurance do for you (and your vehicle). It is worth an investigation to figure out what if your insurance company do their business in a racist way or not! 

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