There is something inherently wrong with America’s vehicle insurance system. And ...
There is something inherently wrong with America’s vehicle insurance system. And no, it isn’t because your insurance company will charge you more for picking out the pretty shade of red on your dream car, deeming that the color is the marker of an aggressive driver.
It’s because the study by Consumer Reports, which partnered with nonprofit public-interest investigative journalism website ProPublica, found that the car insurance companies charge different rates depending on which neighborhood the buyer lives in.
So what did the dynamic duo find? Surprise surprise, well, neighborhoods in the sample states of California, Texas, Illinois, and Missouri that have the higher number of minorities tend to pay higher rates on vehicle insurance.
The discrepancies aren’t small either, and with some areas of cities with higher numbers of minority residents paying up to 30% more than the white neighborhoods.
A logical person would chalk this up to the unfortunate fact that minority dominant neighborhoods tend to be low income neighborhoods and therefore more prone to risk, however the study found that a variation in price remained even when risk factors were equal.
The video below released by Consumer Reports tracks Ryan Hedges and Otis Nash, both vehicle owners in Chicago who live in different neighborhoods and are covered by a same insurance company.
Nash drives the 2012 Honda Accord and pays $190 a month while Hedges owns the 2015 Audi Q5 and pays only $54 per month. The difference? Location location location.
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