from Hacker News

Is insurance more expensive in Black neighborhoods?

by ddispaltro on 8/6/20, 1:44 AM with 45 comments

• by jbarciauskas on 8/6/20, 2:06 AM

  There are a lot of replies here asking about correlation with non-racial factors such as economics or crime. The fact of the matter is that Blacks in America are poorer, suffer higher rates of unemployment, lower educational attainment and are forced to live in higher crime areas as the result of decades of racist housing policies and centuries of oppression. This is reflecting that legacy. Black people pay many different taxes merely for being Black in America, this is just another in a long list. As another example, Black people pay higher tax rates due to higher relative property assessments (https://www.washingtonpost.com/business/2020/07/02/black-pro...).

  For a more complete accounting, I recommend reading The Color of Law https://www.epi.org/publication/the-color-of-law-a-forgotten...

• by usaar333 on 8/6/20, 2:04 AM

  As far as I can tell, Goodcover wrote this as marketing to show that they both have less increased pricing bias toward neighborhoods that are more Black -- and also are significantly cheaper.

  It's the significantly cheaper that is most surprising to me. They are about $100 a year vs. $175 a year for their competitions.

  This makes me wonder -- have they managed to cut bloat by 40% or are they simply using different qualifications to restrict their insurance to lower risk people? If it's the latter, this comparison is not apples-to-apples.

• by zozin on 8/6/20, 2:07 AM

  This is looking at the problem backwards. Neighborhoods with higher proportions of African-Americans living in them are charged higher insurance premiums because AAs tend to be poorer, less educated, etc. because of their unique history in this country (slavery, racism, Jim Crow, etc.), which results in them being more likely to live in rougher/poorer neighborhoods, thus warranting higher insurance premiums.

  Giving AAs $20 off their insurance policy doesn't fix the problem. We need a Marshall Plan-type of investment in AA communities and a multi-generational commitment to try to heal the scar of slavery/racism in this country.

• by faitswulff on 8/6/20, 1:59 AM

  I'd almost rather flag this submission than deal with commenters seeking to justify the structural iniquities and ending their train of thought with the simple correlation between black neighborhoods and crime. Press on! Why is there more crime? Why is there more poverty? What are the structural reasons for the two?

• by underpand on 8/6/20, 1:59 AM

  I'm disappointed that they didn't look at the very obvious input into insurance risk models: crime rate.

  It's very dishonest since it's very obvious. Either complete incompetence or dishonesty.

• by kryogen1c on 8/6/20, 2:05 AM

  it really is telling that articles like this arent laughed off the face of the planet.

  if this were a univariate, observational study of a medical condition claiming "some correlation" with an r2 of .3, the authors would be fighting mobs with pitchforks and torches.

  its such a cheap play at current politics. if people cannot discern this from science, we truly are lost.

• by mturilin on 8/6/20, 1:53 AM

  Did they account for other factors like employment rate, crime rate etc?

  I wonder if there non-racist explanation for this phenomenon...

• by unexaminedlife on 8/6/20, 3:01 AM

  I'd recommend moderators look into who flagged this and determine whether it was warranted...

• by miked85 on 8/6/20, 1:59 AM

  Objectively, I would assume insurance is more expensive in areas with more crime, nothing to do with race.

• by tathougies on 8/6/20, 1:57 AM

  Is insurance cheaper in Indian neighborhoods? Probably.. Indians in America are richer than average and thus their neighborhoods have less crime

  This is a surface level problem of something much deeper which is the preponderance of poor disproportionately black neighborhoods. Most blacks are middle class and live in diverse area but for whatever reason just as there exist China towns there exist black neighborhoods that remain so and suffer from disproportionately high rates of crime and poverty. This is what needs to be fixed .. the insurance pricing is just a symptom of that.

  A more interesting metric is what is the average payout and claim rate in these same neighborhoods with high premiums. How does the premium relate to those two measures?

• by prepend on 8/6/20, 1:57 AM

  I would like to see some real statistical analysis.

  This analysis seems rather worthless for purposes of determining if insurance rates are racially biased.

  Here’s an example of a crazy statement given the R2 is .309 “ The chart above shows some correlation between higher prices for renters insurance and the percentage of Blacks living in the city.”

  I’m no statistician, but I think saying that an R2 of .309 is “some correlation” without pointing out that so is random noise isn’t helpful.

  I would like to see insurance rates comparing racial composition while controlling for other variables. And it’s kind of shocking that they even wrote this article without at least attempting it in the post.

• by spacephysics on 8/6/20, 1:56 AM

  “ So, there’s definitely more work to be done – but we thought it’s important to make a best effort with the messy data we have to start the discussion.”

  This contradicts the title of the article. The title implies the insurance is increased due to racial reasons, rather than it happens that in some communities that are more prone to theft/criminality, the population for those insurance areas are black.

  I find it hard to believe people today are creating insurance policies that are increased because of skin color. Rather there tends to be more crime in specific areas, and people find correlation then assume causation.

• by lilbaine on 8/6/20, 2:15 AM

  Why was this post flagged?

• by Simulacra on 8/6/20, 3:33 AM

  “ Black neighborhoods pay 20% more in renters insurance.”

  Saved you a click.