Could People of Colour Be Paying More for their Car Insurance?

Rest assured, there is nothing political going on here. This news comes straight from data collected from the Citizens Advice Bureau.

With many newspapers reporting on it too, there are claims that minority ethnicities could be paying more for their car insurance. So, we ask the question: isn’t it time for an inquiry?

How has the data been collected?

Providing free advice to people living in the UK, the Citizens Advice Bureau is a charity offering assistance in matters related to legalities, finance and all sorts of other scary things adults have to go through.

In the past year, they found that out of 18,000 car insurance queries linking to debt advice, an extra £250 was often paid by people of colour for their car insurance charges. Forget whether you’re male, female, intersex, or anything else you want to be, forget how old you are, and what you may earn. On average, if you’re white, you’ll be paying at least £250 less.

I’m afraid, that’s not just the crappy part, folks.

A mystery shopper style activity was used, which enabled data collection of some damning statistics. It found that in areas where more than half of the residents were from an ethnic minority, there seemed to be further charges starting from £280.

What’s next then?

Well, companies such as the Association of British Insurers, have been quick to suggest that ethnicity is not a factor involved when offering car insurance premiums. If they were doing, as they rightly pointed out, it would be clear discrimination (and not to mention, illegal).

However, the Citizens Advice Bureau felt that crime rates, disadvantages, accidents and population couldn’t possibly be the sole reason for this problem.

The major concern here are the algorithms that are generated when collecting and processing data. These could unknowingly be contributing to the higher premiums for people of colour.

Where can I find cheap car insurance?

Hopefully, the FCA will continue working with the Citizens Advice Bureau to identify the issues at hand. Nip it in the bud, as they say.

Whilst we can’t put a stop to the algorithms, we can do something that can help. And that’s provide cheap car insurance deals. Begin by completing this quick 3-minute form, and you’ll be on your way.