15 Cities Where Communities of Color Pay Hundreds More per Year for Car Insurance

With many families across the country live paycheck to paycheck, every dollar matters. As American workers pay their recurring bills, pricing variations can create disparities between communities. Studies have shown that Black and Latino people may pay more for home loans, property taxes and even car insurance. This disparity means that in communities of color, paychecks may be stretched even thinner.

In the case of car insurance, location can play a pivotal role in determining car insurance rates. Residents in ZIP codes with higher populations of Black and Latino drivers often pay more in car insurance premiums than if they resided in a ZIP code with more white people.

In a study of 1,648 ZIP codes in 69 U.S. cities, MoneyGeek found that drivers living in ZIP codes with predominantly white populations often pay less for car insurance than residents living in the same cities in ZIP codes with a lower proportion of white residents. The smaller the white population in a ZIP code, the higher the car insurance rates. Fifteen cities in particular have the most significant pricing discrepancies and the strongest negative correlation (-.65 or higher) of car insurance rates and ZIP codes with a higher white population. These 15 cities were ranked based on the biggest pricing discrepancies between ZIP codes.

15. Orlando, Florida

^Shutterstock

In 2019, Orlando welcomed 131.4 million tourists to its amusement parks and other popular attractions. In the Orlando area, 20.5% of residents were born outside of the U.S., and in 36.7% of the city's households, a language other than English is primarily spoken. The disparity in car insurance costs in the city depending on where residents live is 43%, making it No. 15 on MoneyGeek's list. Depending on which ZIP code residents of Orlando call home, they could be paying over $300 more in car insurance per year on average.

• ZIP code with the highest premiums: 32808 (11.6% white)
• Average premium in 32808: $1,915
• ZIP code with the lowest premiums: 32832 (43.2% white)
• Average premium in 32832: $1,547
• Average annual difference in premiums: $368

14. Milwaukee, Wisconsin

^{Sean Pavone / Shutterstock}

Milwaukee is more diverse than some cities. According to the U.S. Census Bureau, 38.8% of the population identify as Black and 35.3% identify as white (non-Hispanic). Although Black residents make up a slight majority in Milwaukee, the ZIP codes with a larger concentration of white people still pay lower car insurance premiums than non-white communities. The average annual difference in auto insurance premiums in the city means that you could spend almost $400 a year more for car insurance, depending on where you live.

• ZIP code with the highest premiums: 53206 (1.3% white)
• Average premium in 53206: $1,218
• ZIP code with the lowest premiums: 53214 (69.5% white)
• Average premium in 53214: $827
• Average annual difference in premiums: $391

13. Minneapolis, Minnesota

^{Mark Herreid / Shutterstock}

Although residents of Minneapolis tend to pay less than the national average for car insurance, there are still discrepancies in pricing based on location in the city. For people who own a car, there is a negative correlation of -0.753 between insurance premiums and the percentage of white drivers who live there. This disparity means that in the ZIP code that is 80% white, drivers pay the lowest car insurance rates, while in the ZIP code that is 16% white, residents pay the highest rates. Depending on what ZIP code these Minnesotans call home, they can pay over $400 more on average for insurance per year.

• ZIP code with the highest premiums: 55411 (16.1% white)
• Average premium in 55411: $1,344
• ZIP code with the lowest premiums: 55447 (82.1% white)
• Average premium in 55447: $934
• Average annual difference in premiums: $410

12. Atlanta, Georgia

^{f11photo / Shutterstock}

For many Atlanta residents, auto insurance is an essential expense. According to a 2019 study, Atlanta's traffic ranked No. 10 in the U.S. for traffic congestion. The population in Atlanta proper is 506,811, but the various communities surrounding the city add considerably to the number of people on the road. According to the U.S. Census, 51.8% of Atlanta residents are Black and 37.6% are white (non-Hispanic). Depending on what ZIP code you live in, there could be a difference of more than $400.

• ZIP code with the highest premiums: 30315 (11.4% white)
• Average premium in 30315: $1,593
• ZIP code with the lowest premiums: 30338 (64.7% white)
• Average premium in 30338: $1,168
• Average annual difference in premiums: $425

11. Phoenix, Arizona

^{Brandon Burris / Shutterstock}

Out of the 15 cities on MoneyGeek's list, Phoenix, Arizona has the largest population at 1.66 million people, making it the fifth-largest city in the U.S. As of 2018, the average household income in the city was $57,957, with each household having an average of two cars. The price for car insurance in Phoenix is similar to the national average, yet there are still varying premiums within the city’s different ZIP codes. With a negative correlation of -0.830 between insurance premiums and the percentage of white residents there, drivers can pay over 30% more for their coverage depending on their ZIP code.

• ZIP code with the highest premiums: 85017 (17.7% white)
• Average premium in 85017: $1,410
• ZIP code with the lowest premiums: 85086 (83.1% white)
• Average premium in 85086: $979
• Average annual difference in premiums: $431

10. Saint Paul, Minnesota

^{Aaron of L.A. Photography / Shutterstock}

Along with Minneapolis, St. Paul comprises Minnesota's Twin Cities. Black residents represent 16% of the population, while 9.6% of the residents are Latino and 51.4% are white (non-Hispanic). While the median household income is a healthy $55,085, the poverty level is just shy of 20%. The average car insurance premiums residents pay in Saint Paul can vary by almost $450 a year, depending on the ZIP code in which they live.

• ZIP code with the highest premiums: 55106 (32.5% white)
• Average premium in 55106: $1,401
• ZIP code with the lowest premiums: 55124 (76.8% white)
• Average premium in 55124: $955
• Average annual difference in premiums: $446

9. Las Vegas, Nevada

^{Virrage Images / Shutterstock}

As the largest city in Nevada, Las Vegas encompasses 135.9 square miles and has a whopping 36 ZIP codes. On average, Las Vegas residents pay nearly twice the national average for car insurance. Within the 36 ZIP codes, car insurance premiums vary widely depending on where residents live. Hispanic people make up 32.9% of Las Vegas' population, white (non-Hispanic) people make up 44.2% and Black people make up 12.2%. Depending on where residents live, they could see average car insurance premiums go up by over $450 a year compared to what other Las Vegas residents pay.

• ZIP code with the highest premiums: 89102 (24.9% white)
• Average premium in 89102: $1,921
• ZIP code with the lowest premiums: 89123 (51.9% white)
• Average premium in 89123: $1,466
• Average annual difference in premiums: $455

8. Long Beach, California

^{Darryl Brooks / Shutterstock}

The racially diverse Long Beach metropolitan area is 42% Latino or Hispanic, 28.1% white (not Hispanic), 13% Asian and 12.9% Black, with a smaller number of other races also included. Long Beach has a negative correlation of -0.785 between auto premiums and the percentage of white people who live there, making it number 8 on our list of cities where people residing in non-white communities pay more for car insurance based on their ZIP code. Long Beach residents living in 90808 pay the lowest premiums, while people living in 90813 pay the highest.

• ZIP code with the highest premiums: 90813 (7.9% white)
• Average premium in 90813: $1,782
• ZIP code with the lowest premiums: 90808 (56.9% white)
• Average Premium in 90808: $1,319
• Average annual difference in premiums: $463

7. Tampa, Florida

^{Nick Fox / Shutterstock}

The cost of living in Tampa is 5% lower than the national average. However, transportation expenses such as bus fare and gas prices are 6% higher than the national average. Tampa residents also pay more for car insurance than the national and state average. Due to Tampa's large size, a car is fairly essential, but depending on what ZIP code residents live in, they could pay an average of almost $500 per year for car insurance.

• ZIP code with the highest premiums: 33614 (21.8% white)
• Average premium in 33614: $2,504
• ZIP code with the lowest premiums: 33647 (49.2% white)
• Average premium in 33647: $2,016
• Average annual difference in premiums: $488

6. Oakland, California

^{Eddie Hernandez Photos / Shutterstock}

Oakland residents pay slightly more than the national and state average for car insurance. Where you live in Oakland can significantly determine how much you pay for car insurance. Oakland has a negative correlation of -0.925 between the amount paid for insurance premiums and the percentage of white people living in a particular ZIP code. This correlation could translate to an average of $502 higher car insurance costs for those who live in predominantly non-white neighborhoods.

• ZIP code with the highest premiums: 94621 (3.8% white)
• Average premium in 94621: $1,693
• ZIP code with the lowest premiums: 94618 (68.6% white)
• Average premium in 94618: $1,191
• Average annual difference in premiums: $502

5. St. Louis, Missouri

^{4kclips / Shutterstock}

Black residents comprise St. Louis' largest race group at 46.9%, with white (non-Hispanic) residents making up 43.2% of the population. The ZIP codes with a larger concentration of white people still pay lower premiums than most non-white communities. In St. Louis, the ZIP code that pays the lowest in premiums has a 95% white population and pays less than $1,000 on average for car insurance. People residing in the ZIP code with .7% of white residents spend an average of over $1,500 for the same coverage.

• ZIP code with the highest premiums: 63115 (.7% white)
• Average premium in 63115: $1,516
• ZIP code with the lowest premiums: 63128 (95.1% white)
• Average premium in 63128: $998
• Average annual difference in premiums: $518

4. Baltimore, Maryland

^{Jon Bilous / Shutterstock}

In Baltimore, Maryland, 62.5% of the residents are Black, 27.5% are white (non-Hispanic) and 5.1% are Hispanic. Residents of the ZIP code 21211, which has a 78.5% white population, pay the lowest car insurance premiums, which are almost $700 less than residents of the ZIP code 21216. The white residents in this ZIP code comprise less than 2% of the community.

• ZIP code with highest premiums: 21216 (1.6% white)
• Average premium in 21216: $2,146
• ZIP code with lowest premiums: 21211 (78.5% white)
• Average premium in 21211: $1,461
• Average annual difference in premiums: $685

3. Louisville, Kentucky

^{Harold Stiver / Shutterstock}

Louisville's average driver spent 23 hours driving in congested traffic in 2019 and 22 minutes traveling to work each day. Depending on which ZIP code these drivers live in, they could be spending an average of $685 more on car insurance per year. The ZIP code with the average lowest premiums in Louisville is 76.2% white, while the ZIP code with the highest average premiums is 5% white.

• ZIP code with highest premiums: 40211 (5% white)
• Average premium in 40211: $1,949
• ZIP code with lowest premiums: 40241 (76.2% white)
• Average premium in 40241: $1,264
• Average annual difference in premiums: $685

2. Philadelphia, Pennsylvania

^{AevanStock / Shutterstock}

Philadelphia car insurance rates are higher than the national average. The city’s immense population of over 1.5 million includes 42.3% Black residents, 34.6% white (non-Hispanic) residents and 14.5% Hispanic residents. Within the Philadelphia region, there are 37 ZIP codes, the most of any on our list. In a city with a large Black and Latino population, the highest-paying ZIP Code has a 6% white population and pays an average of over $2,000 annually for car insurance. The ZIP code with the largest amount of white residents pays roughly $700 less in annual car insurance premiums.

• ZIP code with highest premiums: 19120 (6% white)
• Average premium in 19120: $2,040
• ZIP code with lowest premiums: 19128 (76.9% white)
• Average premium in 19128: $1,335
• Average annual difference in premiums: $705

1. New Orleans, Louisiana

^{AevanStock / Shutterstock}

Out of all 15 cities on our list, New Orleans has the lowest median household income at $39,576. Despite this low income, residents of the Big Easy pay roughly 137% more than the national average for car insurance in New Orleans. There are wide price ranges within the city. Depending on where New Orleans residents live, they could pay an average of over $1,000 more in annual car insurance. This cost excludes car maintenance, repairs and other car-related expenses besides car insurance. In New Orleans, owning a car in certain ZIP codes could cost you up to 10% of your annual salary. This can place a heavy financial burden on families and be even worse if a driver gets a ticket or is involved in even a minor accident.

• ZIP code with the highest premiums: 70117 (24% white)
• Average premium in 70117: $3,282
• ZIP code with lowest premiums: 70123 (77.7% white)
• Average premium in 70123: $2,001
• Average annual difference in premiums: $1,281

Car insurance premiums are calculated through many factors in addition to location. Your age, driving record, vehicle type and more can impact your premium, so shop around the find the cheapest rates on car insurance.

If you suspect you suspect unfair pricing, there are steps you can take:

1. File a complaint with the insurance commissioner in your state. You can also contact your local congressional leader.
2. Shop around. Look for discounts and rewards and compare car insurance quotes.
3. Contact the Federal Insurance Office.
4. Talk to your insurance agent.
5. Learn how carriers determine their auto insurance rates.

About the Author

Poonum Desai is a former economics professor and financial literacy coach. She writes economic articles published on Medium.

Sources

• CBS News. “The 9 worst U.S. cities to own a car.” Accessed September 28, 2020.
• DataUSA. “Long Beach, CA.” Accessed September 28, 2020.
• DataUSA. “Orlando, FL.” Accessed September 28, 2020.
• Inrix. “Atlanta, GA.” Accessed October 5, 2020.
• Inrix. “Louisville, KY.” Accessed October 5, 2020.
• PayScale. “Cost of Living in Tampa, Florida.” Accessed September 28, 2020.
• PR Newswire. “Survey Finds Majority of Americans Live Paycheck to Paycheck.” Accessed October 5, 2020.
• The Washington Post. “The Assessment Gap: Racial Inequalities in Property Taxation.” Accessed October 5, 2020.
• UC Berkeley, Haas School of Business. “Consumer-Lending Discrimination in the FinTech Era.” Accessed October 5, 2020.
• University of Michigan. “Understanding Insurance Anti-Discrimination Laws.” Accessed September 28, 2020.
• U.S. Census. "QuickFacts." Accessed October 5, 2020.
• Visit Florida. “Florida Visitor Estimates.” Accessed October 5, 2020.