‘Someone needs to get to the bottom of this’: Ethnicity, gender, ZIP code can cause higher auto insurance rates

Action 9 investigates why so many drivers are penalized with inflated insurance premiums based on who they are and where they live.

A national consumer group analyzed hundreds of insurance quotes in local ZIP codes and found that your gender and credit score make a huge difference.

Todd Ulrich picked local drivers at random to show how them how they paid far more for auto insurance because of their neighborhood and spending habits.

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“In that zip code you would pay a thousand dollars more,” Ulrich said.

“Wow that’s a lot,” Jeannette Rivera responded.

Ulrich showed Rivera that in her ZIP code, the average rates were higher for women than for men, and that it had nothing to do with driving records.

“Should guys be getting that much of a discount?” Ulrich asked.

“No. Altogether the same,” Rivera replied.

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Action 9 used an insurance premium database from Florida’s 10 largest providers developed by the Consumer Federation of America. The database compared rates by ZIP code.

Elias Santana lives near the airport. Ulrich found that Santana’s average rate was $200 lower than a woman’s premium, but if his credit score was not perfect, the rate would soar.

“Almost a thousand dollars more for a fair credit report,” Ulrich said.

“Why is that?” Santana asked.

“Does it seem fair?” Ulrich asked.

“No, it doesn’t. Not at all,” Santana replied.

The average increase could be thousands of dollars for drivers with poor credit.

“The penalty of having low credit is excruciating. We’re talking thousands of dollars more for auto insurance,” said Doug Heller with the Consumer Federation of America.

The Consumer Federation survey compared rates based on a 35-year-old driver with the same vehicle and a good driving history. Differences in gender, credit, and where you live drove up premiums.

Heller said the survey also found that many ZIP codes had rate spikes based on racial and ethnic makeup. “Communities that have fewer white residents and more residents of color pay more on average.”

“Well, the process seems flawed to us,” Mark Friedlander said.

Friedlander represents the Insurance Information Institute and many major providers. He denies price disparities based on gender or race but says driving history and credit scores do make a difference.

“Those that have higher scores are safer drivers and have less chance of an accident and filing a claim,” Friedlander said.

The industry claims some ZIP codes have higher rates of theft and accidents and said its research found women pay less.

The Consumer Federation of America urges state lawmakers to eliminate punishing rate formulas.

“Someone needs to get to the bottom of this,” Santana said.

What the study certainly verifies is that shopping different providers for rate quotes can make a big difference. Not all insurers use credit scores and ZIP codes the same way.

WFTV’s sister station in Jacksonville created an online tool so you can enter your ZIP code and see big premium swings for yourself. It’s available at wftv.com/weblinks.

Todd Ulrich

Todd Ulrich, WFTV.com

I am WFTV's Action 9 Reporter.