A recent study by an online auto insurance quote company found that African Americans pay more for their car insurance than other races. The Yahoo! News article “African-Americans Are Charged Much More For Auto Insurance Than People Of Other Races, New Study Shows,” talks about the study performed on men in New York City. Black men have the hardest time finding cheap car insurance because the study found that they pay $800 more per year than white and Asian men on average. The study is quick to point out that car insurance companies are not discriminating against black men, they have worse scores on the factors companies use to determine car insurance rates.
Four of the main factors used to determine car insurance rates by companies like Farmers auto insurance are credit scores, neighborhood safety, marital status and employment status. Unfortunately, African-Americans tend to have poorer scores on all four of those factors than white and Asian men. Their credit scores tend to be lower, their neighborhoods tend to be less safe, they get married less often and divorced more frequently, and the unemployment rate is higher in this demographic. So while being African American is not a determining factor to pay higher car insurance rates, the average black man has higher risk factors and therefore, pays more in car insurance. Average yearly rates for black men are $2,910, $2,193 for white men, and $1,945 for Asian men.
