Georgia – ValuePenguin’s study reveals notable differences in auto insurance prices in Georgia, with drivers in Black-majority communities paying up to 25% more than those in mostly white ones. This report draws attention to a concerning trend in insurance rates that would seem to disproportionately impact African American populations throughout the state.
The study noted that the average auto insurance rates in areas with a Black population predominance are 11.1% more than the state average. The gap widens in areas where the Black population exceeds 70%, where premiums spike to 25.1% above the average.
From a more clear-cut standpoint, take into account the annual insurance rates: drivers in mostly Black communities pay an average premium of $4,424; those in mostly white neighborhoods pay roughly $3,342. This comes to a clear $1,081 or 32.4%.
The report further clarifies how these differences change based on the insurer and the vehicle model. For instance, insurance for a Toyota RAV4 costs 33.9% more in Black-majority areas than in White-majority ones. Under identical circumstances, the premium for a Tesla Model Y also displays a 29.5% variation.
Geico had the most notable difference among the insurers assessed: charging 63.3% more premiums in mostly Black communities than in White ones. Farm Bureau had the lowest differential, at 15.6%, on the other side of the scale.
Frequently one of the elements used by insurance firms to set rates, ZIP codes, allow indirectly to consider racial demographics. While using race explicitly as a criterion is unlawful, ZIP codes usually have high correlation with racial composition. Insurers defend the higher premiums in these regions with greater claims rates and supposed higher risks.
The study claims, however, that these factors do not fully explain things. Underlying socioeconomic problems and maybe unconscious prejudices in risk appraisal could also help to explain the observed rate differences in Black-majority neighborhoods.
ValuePenguin’s analysts advise drivers to actively compare insurance rates to help to correct these differences. To assist save monthly expenses, they also advise looking at bigger deductibles and asking about reductions that might not be widely posted.
The analysis by ValuePenguin examined rates among the ten biggest Georgia insurers. The comparison was performed for a fictitious situation including a 30-year-old male driver with good credit and a spotless record. Cross-referenced with demographic data from the U.S. Census Bureau, the data highlighted the racial differences in auto insurance rates among various regions around the state.
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This report starts important conversations on the fairness and equity of insurance policies in Georgia by highlighting the need of more open and fair rate-setting systems free from unequal burden on any community depending on geography or color.
