2017 The Al Neuharth Innovation in Investigative Journalism Award, Large Newsroom finalist

Car Insurance

About the Project

The insurance industry has long argued that higher premiums in minority neighborhoods are justified by a higher risk of accidents. “Insurance rates are color-blind and solely based on risk,” the Property Casualty Insurers Association of America declared in response to the 2015 study.

But a first-of-its-kind analysis by ProPublica and Consumer Reports, which examined auto insurance premiums and payouts in California, Illinois, Texas and Missouri, found that many of the disparities in auto insurance prices between minority and white neighborhoods are wider than those differences in risk can explain. In some cases, insurers were charging premiums that were on average 30 percent higher in zip codes where most residents are minorities than in whiter neighborhoods with similar accident costs.

Our findings document what consumer advocates have long suspected: 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. 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.

This investigation marks the first use of industry payout data to measure racial disparities in car insurance premiums across states. It’s part of ProPublica’s examination of the hidden power of algorithms in our lives — from the equations that determine Amazon’s top sellers to the calculations used to predict an individual’s likelihood of committing future crimes.

Our coverage included a narrative story with arresting photography, as well as two interactive databases. We also made the details of our analysis available via a detailed methodology.