Is Auto Insurance More Expensive For Black People?

Is auto insurance more expensive for black people? Auto insurance companies classify their customers into many different groupings to determine who is and isn't a high-risk driver, based on statistics. Because of this, black people do pay more for auto insurance than white or Asian people.

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Rachel Bodine graduated from college with a BA in English. She has since worked as a Feature Writer in the insurance industry and gained a deep knowledge of state and countrywide insurance laws and rates. Her research and writing focus on helping readers understand their insurance coverage and how to find savings. Her expert advice on insurance has been featured on sites like PhotoEnforced, All...

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Written by Rachel Bodine
Insurance Feature Writer Rachel Bodine

Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insurance...

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Reviewed by Leslie Kasperowicz
Farmers CSR for 4 Years Leslie Kasperowicz

UPDATED: Jun 6, 2022

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To call making racial generalizations a taboo topic in the United States is an understatement. Auto insurance companies, however, do discriminate. As many of you know, insurance companies classify their customers into many different groupings to determine who is and isn’t a high risk driver. This is all based on statistics – and statistically speaking, black people pay more for auto insurance than whites or Asians.

You may think charging black people more for auto insurance is racist, but insurance companies will argue that they are allowed to discriminate on any characteristic they would like. After all, all insurance is based upon statistics. Most insurance companies will openly “discriminate” on age, sex, driving record, type of vehicle, etc. Some, although very few, even go as far as indirectly taking race and putting it into part of their equation.

African American Auto Insurance
Is insurance actually more expensive for black people or is that just a myth?

Our Study

So, do black people actually pay more for car insurance? Or is it just a myth? There are very few studies involving race and insurance costs, so we thought we would do our own. hit the streets of New York City to see if our theory that African-Americans pay more than Caucasians and Asians was true. To keep our investigation simple, we only surveyed male single-car owners who happened to be the only ones on their insurance policy (and who also had a good idea about how much they were paying for insurance). They were all residents of Manhattan. Our sample size was exactly 600 people and included 200 people from each of our three tested ethnic groups (we included Indians and South Asians along with Asians in our study).

Here are our results (rounded to the nearest dollar, annual expense):

  • African American – $2910
  • Asian – $1945
  • Caucasian – $2193

As expected, African Americans paid the most for car insurance. Not only did they pay the most, but they paid the most BY FAR. Our highest annual expense we came across in our study was also from a policy held by a black man. He claimed to pay $4800 annually to insure his classic Cadillac. But why is this? Are insurance companies just plain racist? We searched online for answers.

Like with everything else, insurance companies use facts to determine risk. Here are some tough-to-swallow facts as to why African-Americans may end up paying more than Caucasians:

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Auto insurance companies take a look at how dangerous the area you live in is when determining your auto insurance rates. The more dangerous your neighborhood, the higher you will generally have to pay on auto insurance. This is because dangerous neighborhoods have a strong correlation with car theft, vandalism, auto insurance fraud. Unfortunately for black people, neighborhoods with high African-American populations also tend to have high crime rates.

Statistics show:

  • Blacks are more than 4X as likely as whites to be convicted of car theft.
  • Blacks are 7X more likely than whites to be convicted of murder and 8X more likely to be convicted of armed robbery.
  • Blacks are 15X more likely than whites to be members of youth gangs.
  • Blacks are 7X more likely than whites to be in prison.
  • Blacks are more likely to be convicted of auto theft.

Credit Score

Another big factor insurance companies look at when determining your insurance rates is your credit score. Credit problems in the African-American community are nothing new. Based on the privacy of the issue, there are not many studies done connecting race and credit score. In the studies that were done, however, blacks were shown to have much lower credit scores than whites and Asians.

Statistics show:

  • 84% of black households carried credit card debt. This is compared to 54% of white households.
  • 51% of blacks admit to not paying their bills on time. This is compared to 26% for the rest of America.
  • 54.2% of Blacks in the state of Illinois have credit scores below 620. This is compared to 20.3% for the rest of the state.
  • The 130 million people in the United States with poor credit scores are disproportionately African-American.
  • Over 90% of black familiar earning $10,000-$24,999 had credit card debt.


Married drivers will pay less than single drivers for auto insurance. This is not only because insurance companies view married people as being “more stable.” When you are married, you are able to combine your insurance policy with your spouse to get insurance discounts. Statistics show that African-Americans are much less likely to get and stay married than people from other races.

Statistics show:

  • Blacks have the lowest marriage rate of any racial group in the Untied States
  • 43% of black men and 42% of black women have never been married. In contrast, 27.4% of white men and 20.7 of white women have never been married.
  • Since 1970, the marriage rate for blacks fell by 34%. The marriage rate for the rest of the US only fell by 17%.

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In fact, insurance companies have been under scrutiny for racial discrimination. In 2006, GEICO was sued for allegedly charging African-Americans more for auto insurance. The way GEICO works is that they use many factors including education and employment status as factors in determining auto insurance rates. The plaintiffs claimed that blacks are significantly less likely to hold jobs requiring advanced education, therefore making insurance rates higher for black people. Because of this, GEICO was sued on the grounds of being intentionally racist against blacks.

Statistics do show that African-Americans pay more for auto insurance than Caucasians or Asians. This does not mean, however, that you will pay more for auto insurance just because you are black. Generally speaking, insurance companies DO NOT use race as one of their factors in determining your auto insurance premium. It just so happens that the black population, on the whole, tend to score poorly in these areas.

Let’s imagine for a minute that we have two guys named Dave who both live in the same neighborhood. They are the same age, height, and weight. They both have similar driving records and similar credit scores. They both drive the same car and they use the car for similar purposes. They also both have the same educational background and the same job. The only real difference between them is that Dave #1 is black and Dave #2 is Asian. They will pay the same exact price for auto insurance. The color of their skin does not matter here.

So if you are an African-American, don’t worry, the insurance companies aren’t out to get you. You can get cheap insurance rates just like everyone else. If you are looking for an insurance quote, start searching online. There are many sites, like this one, that allow you to compare insurance rates from many providers until you find one you are comfortable with. Good luck!

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