Black Georgians often pay more for car insurance than their white neighbors because of non-driving record factors such as their credit score and where they live.
According to LendingTree, many African Americans in the Peach State pay 11% more for car insurance than other racial demographic groups.
It’s a practice state Sen. Nabilah Parkes, D-Duluth, calls “modern-day redlining,” and it’s something she hopes to ban if voters choose her to be the state’s next insurance commissioner this fall.
“These policies that are in effect right now in Georgia hurt Black and brown people more than anything,” Parks told Capital B Atlanta. “We need to hold these policies accountable and make them illegal.”
Parkes, 36, is a two-term state lawmaker and a metro Atlanta native who grew up in Norcross and Lawrenceville. She launched her bid to become Georgia’s next insurance commissioner in January. As of Friday, she’s running unopposed for the Democratic nomination to take on incumbent GOP Insurance Commissioner John King in November.
The Bangladeshi-American married mother of three is also a Georgia State University grad who worked as a legislative aid to Democratic lawmakers in Washington before pursuing her own career as an elected official.
On Thursday, she introduced six bills aimed at lowering the cost of insurance for cash-strapped consumers in Georgia who say affordability woes are their top concern heading into November’s pivotal midterm election cycle.
One of those bills, SB 506, would make it illegal for car insurance companies in Georgia to use geographic classifications, such as a person’s ZIP code, to determine premium rates.
Insurance companies examine the number of accidents that happen in certain regions and use those calculations to determine risk and make the case for higher prices. But not everyone who lives in majority-Black ZIP codes is a bad driver, Parkes pointed out, and forcing some to pay more because of where they live may be unfair.
A Moneytree report released in December revealed Atlanta had the fourth-highest correlation in the nation between higher premiums and non-white ZIP codes. California and Michigan are among the states that strictly regulate or ban the ability for insurance companies to charge more based on where people live.
“You and I could have the same driving record, but because you live in a different ZIP code, they’re going to jack up your rates,” she said.
Georgians already pay the ninth-highest average annual cost for minimum car insurance coverage, according to a Bankrate study released in November.
Parkes also introduced legislation Thursday that would ban the use of credit scores to determine insurance rates in Georgia, another practice that causes Black policy holders to pay more for their premiums.
A 2023 Consumer Federation of America study found Americans with poor or fair credit pay higher average annual auto insurance premiums than those with excellent credit.
“Last I checked, your credit score doesn’t have anything to do with your driving record,” Parkes said.
She also wants to mandate insurance companies obtain written prior approval before raising rates in Georgia. State law only requires insurers to file a notice and undergo a 60-day review period before hiking rates “automatically.”
The legislation that Parkes introduced would require companies to get approval first. Parkes accused King of effectively rubber stamping rate hikes at the expense of constituents.
“Commissioner King and Georgia Republicans have looked the other way while insurance companies jack up rates, discriminate against people for nothing reasons and have their profits,” Parkes said.
King didn’t immediately respond on Friday to an emailed request for comment.
Read More:
