Missouri car insurance industry is super racist, report finds

Earlier this week, White House Press Secretary Sean Spicer dismissed ProPublica as a “left-wing blog.” ProPublica is not a left-wing blog. It is an independent, nonprofit news organization responsible for some of the finest investigative reporting in America. Sean Spicer is a sad, doomed clown, and he got owned for trying to imply that ProPublica is down in the hyper-partisan gutter with the Addicting Infos and Breitbarts of the world.

Today, ProPublica and Consumer Reports co-published a hefty investigative piece on disparities in car insurance premiums in minority neighborhoods versus white neighborhoods. It looked at four states: California, Illinois, Texas, and, yes, Missouri. 

The story’s lead anecdote compares the premium of a 26-year-old black man in the minority-heavy East Garfield Park neighborhood of Chicago with the premium of a 34-year-old advertising executive in the city’s predominantly white Lakeview neighborhood. 

The black man pays GEICO $190 a month to insurance his 2012 Honda Civic.

The white man pays GEICO $54 a month to insure his 2015 Audi SUV.

Incredibly, this is the case even though Illinois insurers pay out 20 percent more claims in Lakeview than in East Garfield Park. 

“Despite laws in almost every state banning discriminatory rate-setting, some minority neighborhoods pay higher auto insurance premiums than do white areas with similar payouts on claims,” ProPublica’s report found. “This disparity may amount to a subtler form of redlining, a term that traditionally refers to denial of services or products to minority areas. And, since minorities tend to lag behind whites in income, they may be hard-pressed to afford the higher payments.”

In Missouri, ProPublica found that 21 of 25 car insurers had “pricing disparities that didn’t appear to be justified by risk” — i.e., they were motivated by redlining and race. 

“In Missouri and Texas, at least half of the insurers we studied charged higher premiums for a safe driver in high-risk minority communities than in comparably risky non-minority communities,” the report states. 

Subsidiaries of Berkshire Hathaway, Liberty Mutual and Auto Club Enterprises in Missouri all were found to “charge 30 percent more on average in risky minority neighborhoods compared with similarly risky majority white neighborhoods.” (Missouri’s minority neighborhoods were defined as having greater than 50 percent minority population; you can read about the report’s methodology here.) 

Of the four state insurance departments contacted for comment on the report, only Missouri’s agency, the Missouri Department of Insurance, failed to respond.