Race Matters: New Study Shows Black People Pay Up To 70% More For Car Insurance Than Whites

Young African American woman eagerly takes car key handed to her

How much do you pay for auto insurance?

According to the latest study, a good driver in a predominantly Black community will pay way more for car insurance coverage than a similarly situated driver in a white community according to Consumerist:

More precisely, researchers found that when a neighborhood’s racial makeup is at least 75% African-American, car insurance premiums average 70% higher than those quoted for the same driver living someplace where the African-American population is below 25%. For the fictional driver in the study, that means a difference of more than $400 per year ($1,060, compared to $622).

Even at lower concentrations of African-American residents, the average premiums are still significantly more expensive. That same driver would face an average rate of $831 (a 34% difference) if she lived in a community that was between half and three-quarters African-American. The average premium drops to $768 when white residents account for half to three-quarters of the population. That’s still around 24% higher than people pay in predominantly white ZIP codes.

In the densest urban communities — where premiums are typically high because of traffic, crime, and potential for damage — the average premium ($1,797) in predominantly African-American ZIP codes is 60% percent higher than in dense urban areas populated primarily by white residents ($1,126); a difference of more than $600.

The gap isn’t as distinct in rural ZIP codes, where predominantly white communities see an average of $542 for their insurance premiums, 23% less than the $669 average found in predominantly African-American rural areas.

Do you think your race determines your rates? Read the full study HERE.


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