Testing for Discrimination in Home Insurance: Results from New York City and Phoenix

George Galster, Douglas Wissoker and Wendy Zimmermann
Additional contact information
George Galster: College of Urban, Labor, and Metropolitan Affairs, F/AB Room 3198, Wayne State University, Detroit, MI 48202, USA, George_Galster@wayne.edu
Douglas Wissoker: The Urban Institute, 2100 M Street NW, Washington DC20037, USA, dwissoke@ui.urban.org
Wendy Zimmermann: The Urban Institute, 2100 M Street NW, Washington DC20037, USA, Wzimmerm@ui.urbanorg

Urban Studies, 2001, vol. 38, issue 1, 141-156

Abstract: This paper examines the results of a paired testing study of neighbourhood-based discrimination in the provision of quotes for home insurance in New York City and Phoenix, Arizona. We examine whether agents treated insurance-seekers buying their first homes in moderate-income, predominantly black or Hispanic-occupied neighbourhoods differently from insurance-seekers in comparable predominantly white neighbourhoods. The study examines differences in whether a quote is provided, the type of insurance and policy options offered and the premium quoted. Overall, of 10 key measures (5 for each city), only 1 (optional replacement cost coverage on personal property in Phoenix) showed a statistically significant difference consistent with discrimination. Testers in Hispanic neighbourhoods of Phoenix were quoted premiums 12 per cent higher than those offered to testers in white neighbourhoods. This difference, however, is in line with the price schedules for the state-approved rating territories in which the white and Hispanic homes were located.

Date: 2001
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Persistent link: https://EconPapers.repec.org/RePEc:sae:urbstu:v:38:y:2001:i:1:p:141-156

DOI: 10.1080/00420980125481

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