Minority Areas In U.S. Pay 68% More For Car Insurance

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Written by
Cara Carlone
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By comparing car insurance rates to demographics by area, we found a correlation between the percentage of the population which is non-white and the average car insurance rate in the area. Put simply, as the percentage of a local population which is white goes down, the cost of car insurance goes up.

Discriminating on Demographics

Do you ever feel that you’re paying too much for your car insurance? Aside from inflation and rising living costs, there could be another hidden reason for high insurance rates. Depending on where you are in the country, the insurance rates offered will vary. This can be due to larger populations, higher rates of auto accidents, or high crime levels, but also, as our research reveals, it may be due to the ethnicity of the local population.

Average Rates by Majority Ethnicity

We used an insurance rate calculator and national census data to find the average monthly charge for car insurance of a 2017 Honda Accord in areas with different ethnic majorities:

Zip Ethnicity Average Rate
Majority White $39.26
Majority Asian $69.75
Majority Black $66.98
Majority Hispanic $69.10
No Majority $62.24

Researching National Rates

Our research revealed that people living in zip codes where the population is less than 50% white pay on average 68% more than those living in areas which have a white majority.

In fact, five of the top 10 most expensive areas for car insurance in the country have a black majority, while none have a white majority. The top 3 most expensive zip codes we found are all in Brooklyn and are all areas with a high percentage of the population being black.

In these districts car insurance for our 2017 Honda Accord costs $222 per month. Furthermore, 2 of the most expensive areas have an Asian majority – even though having a zip code with an Asian majority is rare.

National Hotspots

Here are the top 5 most expensive states and cities in the United States, by average insurance rate:

Most Expensive U.S. States For Car Insurance

New York
New Jersey

Most Expensive Cities For Car Insurance

City / Borough
Brooklyn, NY
Corona, CA
Monterey Park, CA
Bronx, NY
Hamtramck, MI

Again, we can see neighborhoods with high minority populations popping to the top of the list – Hamtramck, for example, is also the only Muslim-majority city in the United States.

Ten Times Cheaper Insurance

On the other hand, of the cheapest 25% of the zip codes we looked at, 91% are populated with a white majority, paying an average of just $26 per month. What’s more, of the top ten cheapest zip codes we found all of them had a population which was at least 85% white. In these areas insuring our Honda costs as little as $21 per month – more than 10 times cheaper than the most expensive black neighborhoods mentioned above.

A Trend Across All of America

And it is not just at the extremes of cost where the trend is seen. Yes, the cheapest areas have white majorities, and yes, the most expensive have other ethnicities, but we found the trend is consistent throughout the middle ground of America too. Our results show that the less white your zip code, the more you pay for car insurance.

Excluding Accidents and Crime Rates

Even when considering the amount of road traffic accidents and the crime rates of the regions, the areas with a high white population pay significantly less. For example, zip code 59901 in Evergreen, Montana and zip code 19802 in Wilmington, Delaware.

Both have similar crime rates, similar number of accidents per capita, and similar population size, but one is 92% white, and one is 70% black. The area with a high black population pays $104 per month on average, more than three times the $31 the majority white area pays.

Unfair Services

There are of course some majority-white areas where the rate of car insurance gets relatively high. However, our research into road traffic accidents revealed that on average, the charge for insurance in white areas increases with the number of accidents in the area – as you’d expect.

However, this is not the case with areas which have higher minority populations. Rates in these places seem to fluctuate haphazardly area by area, independent of the number of accidents which occur there.

“In a world where financial equity should be a given, not a privilege, the disparities in car insurance rates across different communities highlight a systemic issue that demands our attention. As consumers, it’s crucial to stay informed, question the status quo, and advocate for transparency and fairness in all aspects of financial services.

We’re committed to empowering individuals with the knowledge and tools they need to make the best purchase for them. Financial services should work for everyone, not just a select few,” added Max Coupland, CEO of Investopedia.

What Should You Do?

The insurance rates we worked with in this article were taken as samples from six large U.S. auto insurance carriers, but of course, this doesn’t speak for the entire industry. Each provider will have their own set of regulations which guide the rates they offer, and so if you want to insure your vehicle it is important to do some research before making a purchase.

Using insurance comparison tools can help you find a provider which protects your vehicle without charging you for irrelevant information like the color of your skin.


We used a car insurance calculator from carinsurance.com, which uses zip codes to find the average insurance rate by area. The calculator takes data from the largest auto insurance carriers in the U.S. and finds the average rate for a 2017 Honda Accord.

We used the tool and stayed consistent with the “driver” (a married, male, 30-year-old driver with clean records and good credit) to isolate the effect of location on car insurance rates. With this data, we homed in on the most expensive areas to insure a car.

Next, we gathered information on the demographics of each zip code from the American Community Survey, so we could compare the insurance rates to the demographics of each population. In addition to this, we also gathered data on road traffic accidents and crime rates in each zip code area to avoid drawing wrong conclusions about areas which have justifiably high rates.

Looking For Car Insurance?

Are you in search of reliable car insurance coverage? Look no further! Our team is here to assist you in finding the perfect insurance plan tailored to your needs. With a wide range of options and competitive rates, we ensure that you drive with peace of mind. Whether you’re a new driver or looking to switch providers, let us guide you through the process and provide the protection you deserve.

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