ATLANTA — A recent study found that drivers in Georgia’s majority-Black ZIP codes pay higher car insurance premiums than those in other areas. Residents and advocates call for changes to how insurance rates are calculated, citing concerns over fairness and socioeconomic inequities.
Bridget Cunningham, a resident of the Capital View neighborhood in southwest Atlanta, was shocked to discover that her car insurance premiums were higher than those of her friends in other parts of the city.
“I’m very surprised,” Cunningham said. “I don’t have any tickets, no DUIs…nothing! My record is clean. My insurance shouldn’t be that much.”
Cunningham recently received quotes for basic liability coverage for just under $200 per month. Her friends living in Buckhead on Atlanta’s north side reported paying $30 less for the same coverage.
A new study by LendingTree reveals that drivers in Georgia’s majority-Black ZIP codes pay, on average, 11% more for car insurance. While Georgia law prohibits using race in setting insurance rates, companies are allowed to use ZIP codes, factoring in elements such as crime rates, traffic patterns, and local accident statistics.
Raphael Baker, a longtime insurance agent who previously ran for Georgia Insurance Commissioner on an equity platform, explained how insurance rates are calculated.
“There are socioeconomic factors that have nothing to do with your driving history, such as your credit score, whether or not you own a home, and your marital status,” said Baker. “It disproportionately affects Black people. There’s inequity because of these socioeconomic factors.”
Some states, including California and Massachusetts, have banned using ZIP codes and credit scores to determine car insurance rates. Advocates, including Cunningham, hope Georgia will follow suit.
“It’s not fair when you’re judging by where someone is living,” she said.
For those looking to save on car insurance costs, Baker suggests bundling auto insurance with renters or homeowners coverage, staying with the same provider for at least a year to earn loyalty discounts, and increasing liability limits above the state minimum. Although this may cost more initially, it can save money over time.
Click here to see the full LendingTree report, including a breakdown of insurance providers with the largest and smallest rate disparities.