Check out this math problem:
Geico charges Otis Nash $190 a month for car insurance. He lives in Chicago's East Garfield Park. Ryan Hedges pays Geico $54. He lives in Chicago's Lake View neighborhood.
East Garfield Park and Lake View have virtually the same auto insurance risk rating. In fact, from 2012 to 2014, Illinois insurers paid out 20% fewer claims in East Garfield than in Lake View. Hedges' Audi is worth much more than Nash's Honda, and Geico has given both men a 'good driver discount.' So why does Geico charge Nash nearly 4 times more than Hedges?
A new ProPublica/Consumer Reports investigation reveals the answer: Because East Garfield Park, where Nash lives, is majority black. Lake View, Hedges' neighborhood, is majority white.
There's no place for profiling in auto insurance. Tell Geico to stop overcharging drivers in minority neighborhoods.
Nash is not alone. For years, insurers have explained away this kind of inequality by arguing that the risk of accidents in minority neighborhoods is greater. However, as the report shows, Geico and other insurers routinely charge drivers in minority neighborhoods premiums up to 30% higher than drivers in white neighborhoods with similar accident risks.
This is not Geico's first brush with discrimination. In 2015, the Berkshire Hathaway subsidiary agreed to pay $6 million in a settlement with the California Department of Insurance. The department found that Geico was discriminating against low-income drivers by targeting them with inflated rate quotes, often charging them as much as 54% more than more affluent drivers.
SumOfUs members have a proud history of fighting discrimination and inequality. In the past thousands of us have come together to demand PayPal open service to Palestinians, challenged Uber's worker exploitation, and called out Warren Buffett for union-busting. It's time to join forces once again and stand up for drivers like Otis Nash and others across America.
Tell Geico: End the discrimination. Stop profiling and overcharging minority neighborhoods.
More information
Consumer Federation of Ca/PR Newswire. 24 August 2015.
ProPublica/Consumer Reports. 5 April 2017.