By admin 
(InvestigateTV) — A new report from the Consumer Federation of America finds homeowners in predominantly Black and Hispanic communities pay significantly more for homeowners insurance than those in predominantly white communities — a disparity the group says raises concerns about modern-day redlining.
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Sharon Cornelissen, director of housing at the Consumer Federation of America, said the findings are clear.
“Even if insurance companies come up with all kinds of reasons, our report still shows that homeowners in Black and Hispanic communities pay more for their homeowners insurance,” Cornelissen said. “That’s a fact.”
The found homeowners in predominantly Hispanic communities paid, on average, 30% more in annual premiums — about $950 more — than homeowners in white communities. In predominantly Black communities, average premiums were 16% higher, or about $500 more per year.
States with the largest reported premium gaps for Black communities included Michigan, Pennsylvania, New Jersey, Massachusetts and New York. For Hispanic communities, the report listed Florida, New York, Washington, Massachusetts and Kansas.
Cornelissen said the group controlled for comparable policies and environmental risk factors, yet the disparity remained.
“We just compare the same policies. We compare the same environmental risk. We compare people living across states — we cannot really explain the racial premium gap,” Cornelissen said. “We try to explain it in our report, but it persists. We’re not saying that insurance companies are meaning to do this, but the effect is there.”
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The report examines a pricing practice known as territorial pricing, in which insurers consider location when setting rates. The Consumer Federation of America said insurers may rely on small geographic areas — including ZIP codes or census tracts — as part of their assessment of community-level risks.
Cornelissen said the homeowners insurance affordability problem extends beyond any single community.
“We believe that the homeowners insurance crisis is a national crisis, and it’s impacting almost everyone,” Cornelissen said. “What this report shows though is that some communities are uniquely vulnerable. Everyone pays too much — but you may be overcharged even more if you live in a Black or Hispanic neighborhood. And that’s really worrisome because it can shape even your chance to afford to buy a home to begin with.”
Cornelissen encourages consumers with questions about insurance pricing to contact their state insurance department and their state lawmakers.
The National Association of Insurance Commissioners said in a statement that it does not set insurance rates or directly regulate insurers. That authority rests with each state’s insurance department.
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