Auto Insurance

High Price of Mandatory Auto Insurance in Predominantly African American Communities

Most states prohibit the consideration of a driver’s race or ethnicity when determining premiums. However, the findings of this report suggest that good drivers living in predominantly African American communities will pay, on average, 70 percent more for state-mandated minimum liability-only coverage than a similarly-situated driver in a predominantly white community. After controlling for both population density (as a proxy for traffic density) and income, we found that drivers living in predominantly African American communities continued to see higher average premiums than similarly situated drivers in predominantly white communities.