Opinion: If New York wants affordability, it must eliminate discriminatory auto insurance pricing

Gov. Kathy Hochul’s affordability agenda has focused attention on the high cost of auto insurance, but her proposed solution will do little to help consumers while insurance companies report record profits and crash victims are revictimized by laws increasingly stacked against them.

For years, insurers have charged higher premiums not because drivers are less safe, but because of their ZIP codes. This is modern-day redlining. 

A ProPublica analysis found that predominantly African American communities were quoted auto insurance premiums about 70% higher than comparable predominantly white areas, even after controlling for driving records and other risk factors. Neighborhoods with higher numbers of Black and brown residents, seniors, and working families routinely pay more for the same coverage—even when driving records are similar.

In New York, drivers with poor credit pay an average of $1,367 more for auto insurance than drivers with excellent credit, even when both have spotless driving records. It defies common sense that a safe driver with weak credit can be charged hundreds more than someone with a DUI simply because that person has strong credit.

This is because insurers rely on opaque algorithms that factor in ZIP code, credit history and consumer behavior – inputs that closely track race and income but have little to do with driving safety. The result is a system that quietly shifts costs onto communities that can least afford them, while shielding insurers from accountability.

Instead of confronting this discrimination, policymakers are now being urged to weaken the rights of people injured in car crashes. 

The governor’s 90/180 proposal would bar injured people from recovering damages unless they can prove they were unable to perform most of their daily activities for at least 90 of the first 180 days after a crash, which would exclude many seriously injured workers who return to work out of economic necessity. This proposal puts a target on working people – especially workers of color – by denying compensation to those who cannot immediately return to work after a crash, effectively penalizing people in physically demanding jobs who are most likely to be injured and least able to take unpaid time off. 

We are told that limiting recovery, narrowing the definition of serious injury and reducing accountability will make insurance more affordable.

It will not.

Weakening protections does nothing to lower premiums or rein in discriminatory pricing. It simply ensures that when someone in a neighborhood of color is injured, they receive less help and face greater hardship. That is victim-blaming.

If affordability were truly the goal, the focus would be on transparency and enforcement. Regulators would demand to know how rates are set and why ZIP codes are still being used as proxies for race and income. They would shine a light on pricing models that penalize entire neighborhoods, instead of punishing manual laborers and crash victims.

You cannot fix affordability by entrenching discrimination. You cannot lower costs by blaming victims. And you cannot build a just system while ignoring who is being overcharged – and why.