Insurance is a necessary facet of life for those who want to sleep soundly at night, which is why it’s so fundamentally unjust that insurance companies regularly racially profile prospective customers. Many Americans suffer at the hands of racial discrimination when it comes to purchasing insurance without even knowing about it, since the insidious way this practice is carried out is often discrete by design.
Knowing that you’re not receiving an unfair deal because of your race is imperative if you’re sick and tired of getting ripped off without good reason. Here’s how you can tell if your insurance company is racially profiling you, and what you can do about it.
It happens more than you’d think
Most people are familiar with the fact that racial discrimination is an everyday part of life for countless billions across the globe, but mistakenly believe that the current U.S. business environment is largely free of this bias. Nothing could be further from the truth, however; racial discrimination in the insurance industry is rampant, and happens more often than most would think. A thorough investigation by ProPublica, for instance, uncovered the fact that African American neighborhoods were paying drastically more for auto insurance than their white counterparts.
Since at least 2015 we’ve known that African American neighborhoods pay nearly 70 percent more than white ones when it comes to insurance premium averages. Relatively little has been done to crack down on this disgusting practice, however, which means it’s important for everyday consumers to be suspicious when purchasing coverage, especially in areas that have historically discriminated with gusto.
Many professionals recommend brushing up on general discrimination, like rampant housing discrimination, to better understand the general warning signs of bigotry that foreshadow racial profiling. Not everything in life is clear cut, however, and sometimes the racial profiling that occurs in the insurance industry can be carried out in a nonchalant way that few would instantly recognize. Geographical patterns of discrimination based on neighborhood payment averages, for instance, are invisible to the blind eye until datasets make them clear for all to see.
According to Time, you could encounter discrimination regardless of which coverage option you pursue. Popular insurers like State Farm, Allstate, and Geico all exhibited racial disparities of at least 52 percent, with insurance companies like Progressive seeing a whopping 92 percent disparity in rates between whites and people of color.
The law enables discrimination
When many people learn about the immense discrimination in the insurance industry, they often lament that the law should do something about it. As a matter of fact, however, law effectively enables discrimination in the insurance industry, even church insurance, by permitting companies to clump minorities into “riskier” groups, thus offering them worse rates.
Those living in urban areas, where minorities geographically cluster, are more likely to face this kind of discrimination than their rural peers. One study from 2013 also found that lifestyle choices can lead to insurers clumping consumers into disparate groups based on their perceived level of risk. This, too, naturally leads to discrimination as insurance companies label people of color to be riskier than white consumers.
Don’t let yourself fall victim to discrimination just because you’re trying to exercise your right to secure insurance for yourself, your business, or your family. Bigotry and racial profiling are still mainstays of the American insurance industry rather than outliers, so it’s important that you be well aware of discriminatory trends and what to do if unfairly denied coverage. Despite the discrimination and profiling in the insurance industry, making sure that you’re covered is vitally important for anyone pursuing meaningful financial security.
