Watchdog Group Wants California to Look into Claims in ProPublica Report

April 7, 2017

Consumer Watchdog, a California-based advocacy group, is asking the state’s insurance commissioner to open an investigation into the alleged redlining uncovered by a ProPublica report that claims that four auto insurance companies in California mark up prices by as much as 32 percent for drivers in minority neighborhoods compared to white neighborhoods with similar risk.

The ProPublica report drew criticism from the Insurance Information Institute, which questioned its methodology and conclusions. ProPublica hit back at I.I.I. today with its response to the I.I.I.

In a letter sent to Insurance Commissioner Dave Jones today Harvey Rosenfield, the author of the state’s Proposition 103, and Carmen Balber, the executive director of Consumer Watchdog, noted that Prop 103 banned price discrimination by prohibiting insurance companies from basing auto insurance rates primarily on ZIP code.

Consumer Watchdog asked the Department of Insurance to confirm or refute the report’s findings by opening a formal, public investigation and requiring insurers to submit their risk data by ZIP code.

According to the report, California did better than the three other states reviewed – Illinois, Missouri and Texas. However, the report found that a handful of major carriers charged at least 10 percent more in riskier minority ZIP codes than in ZIP codes were there were a majority of non-minorities.

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Latest Comments

  • April 10, 2017 at 6:05 pm
    Mr. Obvious says:
    Read the last sentence and it tells the tale...."charged at least 10 percent more in riskier..." Rates are being set based upon risk e.g. historic loss experience, not demogr... read more
  • April 10, 2017 at 5:09 pm
    George Lee says:
    So, maybe we need more $500 per hour people to uncover crap like this.
  • April 10, 2017 at 11:22 am
    Observor says:
    The irony is that Consumer Watchdog, Consumer Union and the actuarial firms that charge insurance companies $500 an hour for their forced "services" only employ wealthy white ... read more
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