The fairness of insurance companies discriminating

In another thread, a teenage male laments about the ludicrously high insurance rates that must be payed if he wants to drive.

It seems acceptable for insurance companies to discriminate based upon age and gender. The argument, it is raised, is that certain groups (teenagers) and genders (males) are more dangerous than others, and have been proven more dangerous by statistics. And statistics, it is said, don’t lie. Therefore, it is alright to discriminate against certain groups of people and charge them more.

BUT, what would happen if an insurance company charged blacks more for insurance? What if they presented ironclad, incontrovertable evidence that blacks have a significantly higher number of traffic accidents?

If it’s NOT alright to discriminate based upon ethnicity, how is one form of discrimination based not upon individual behavior but upon membership in a group, different from another?

When they do, start the thread again…


Hey, you’re not getting away that easy!

This is a hypothetical scenerio we are talking about. I’m not asking about whether there is proof of this, I’m just asking “What if?”

This has been discussed before and I doubt there is anything substantially new to add to what has already been said.

Perhaps it’s because racial/ethnic discrimination is seen as more serious and invidious than age and gender discrimination.

Consider that most people get to be different ages at different times. (Not true for race/ethnicity.) Further, people of different ages and genders as a rule live together in the same households and neighborhoods. (Not necessarily true for race/ethnicity)

So basically, not all discrimination should be treated equally. (har har).

The beginning, teenage driver doesn’t have a record of several years of established, safe driving to point to. In his case the only thing the company has to go on is the statistic respecting teenage, male drivers.

This is not unwarrented discrimination.

Also, how do you go about proving that somebody is black? Skin color can be deceiving, and there are no generally agreed-upon genetic determinants of race?

I think ultrafilter makes a good point. Even if such “ironclad” proof existed, there is so much cross-breeding between races, that it’s difficult to refer to many people as “black” or “chinese” or whatnot.

Aside from that (and here I take some liberty with the premises of the OP), how could you tell whether the statistical likelyhood of lower driving safety was due to genetics, upbringing, geography, or whatnot? If it’s cultural, then a black child raised by a white family would be no more likely to drive dangerously than a white child raised by a white family. There would be far too many uncertainties, practically speaking, to ever implement this in a fair fashion.

That being said, if it was proven that, based solely on genetics, having more than x% of a certain race in your blood meant that you were more at risk than other races, then I think it would be fair to discriminate, given the precedent of charging more for males. (Contrary to what lucwarm says, the justification for age-based discrimination and that for gender-based discrimination are not at all related. One is saying, “You have no experience yet, and we don’t know what kind of driver you are, thus we will assume the worst and charge you more.” The other is saying, “We don’t care what kind of driver you are, or how much experience you have, we are going to charge you more for circumstances beyond your control, based on statistical findings.”)

This has actually been discussed in previous threads. The reality is that in the past, insurance companies did engage in racial discrimination. The way they did it was to avoid writing policies and/or charge higher premiums for residents of certain neighborhoods.

This technique was known as “redlining.” Of course it was much rougher than age and sex discrimination, but it was practiced, and the effect was to discriminate against certain racial groups.

AFAIK, “redlining” is now illegal everywhere in the U.S. And I’m pretty confident that many insurance companies would engage in “redlining” if it weren’t so prohibited.

Please re-read what I said. I was explaining why racial/ethnic discrimination is seen as more deserving of legislative prohibition than other forms.

As someone who’s had few health problems, and accidents that did no great damage, it won’t be surprising that I resent the $1,000s paid because insurance companies can’t figure out that: I don’t drive intoxicated, don’t have a cell phone, rarely eat or drink in the car, and quite a few other etceteras.

So I would immediately switch to any insurance company that showed evidence of being able to take all the factors of my habits into account. It’s a simple business proposition.

Which brings up the reason for posting. In the future, say 20 years from now, I’d like a computer program that advises me before getting into a risky situation, and then gives me the choice to take the risk. If I take the risk, I agree to pay an extra insurance premium for that one event. So, if I decide to ride my bicycle without a helmet (which I’ve been doing for years), I would be willing to pay extra health insurance for it. If I decide to ride my bicycle in the dark, on a rainy day without a helmet, the computer program should tell me that my risk has gone up by about 20 times. This way I don’t get into unintentionally dangerous situations, and nobody else has to pay for my risk-taking.

Of course, even with a superb computer program, most factors aren’t going to be dealt with directly, but indirectly. But major risks such as driving a car or bicycle under the influence of just about anything should be easy to catch.

And for those who don’t want to be monitored? Switch it off, and take the very high default insurance premiums. Or be uninsured.

How do you explain Michael Jackson? :wink:

Frankly, I think this makes age discrimination worse than racism. Both forms of discrimination oppress a certain class of people, but since age discrimination oppresses different individuals each year, there isn’t enough momentum to build up a real opposition.

How much success would the civil rights movement have had if individual blacks only had to wait a few years to vote and attend white schools? How many would-be protesters would have grudgingly accepted their temporary oppression, and ignore the fact that after ‘a few years’ passed, someone else would be oppressed in their place?

Race is a vague term, but skin color isn’t.

You know the scale they have on toothpaste commercials to measure how white your teeth are? We could have a similar scale for skin color. If your skin is between shades 4 and 7 on the Rembrandt scale you pay $xxx, between shades 8 and 10 you pay $yyy, etc.

Sure, some individuals would get screwed. Some 18-year-olds are better drivers than some 30-year-olds, but that doesn’t seem to stop age discrimination. Insurance is about statistics.

If statistics were to show a correlation between skin color and driving habits, would it be acceptable to charge drivers more for insurance based on the color of their skin?

You know, this is a problem I’ve been facing. I’ve had my license for about a year and a half, in addition to the teaching I got with my permit. I have not had an accident, no tickets, I’ve never even been pulled over. I drive safely, I don’t speed…I drive carefully and safely.

But, you know what? I’m probably required to pay twice that of 30 year old dumbass drivers who have at least one accident and multiple tickets, SIMPLY because I’m 19.

Why should insurance companies be allowed to discriminate against me? I bet I drive better than half of their employees and am still required to pay more than them.

You are mixing the generic word “discrimination” for the more narrowly defined phrases “lawful discrimination” and “unlawful discrimination.” For example, it is unlawful to discriminate with respect to race and ethnic origin because the discrimination is without merit, and we have laws prohibiting it.

In the case of charging teenage males higher vehicle insurance premiums than other “groups” is because:

  1. The practice is lawful. It does not fall into any of the legally recognized areas of what constitute unlawful discrimination.

  2. The practice has merit. There is empirical evidence that male teenage drivers, lacking skill and experience, suffer a disproportionate amount of insurance claims. Their risk factor is disproportionately higher than other segments of the driving population.

In the case of the former statement, there are many things that people might consider unlawful discrimination, if there was a law against it in the first case. This thread illustrates just one of the better known ones.

In the case of the latter statement, the evidence exists. It can be measured, all other things being equal. Just as those people attempting to establish credit for the first time have many more hoops to jump through than someone with an extensive and prudent credit history, the lender is taking a bigger risk with a new client. Hence, they are more wary and adjust their risk factors accordingly.

Is all of this fair? Depends upon who you ask. Should vehicle insurance be a flat rate for everyone? Teenage males would love it, but it would not change the fact that teenage males will still cost the insurance providers more in payouts. In this case, everyone else pays for a select group’s immaturity and undeveloped skill set when it comes to driving. In addition, there is no incentive for teenage male drivers to drive better and thus reduce their risk factors.

There will always be case by case anecdotal stories where teen age male drivers are safe, do not get into accidents and remain so. OTOH, there will alays be 30-year-old, 40-year-old, 50-year-old, etc., drivers who seem to draw accidents to them. All the stories are true. Yet, when looking at the larger picture, which is what insurance companies do to spread the risk and reduce overall costs to themselves and their insured, teenage males still fall into the riskiest group.

(Don’t forget that driving is a privilege and not a right. Driving a vehicle is a learned experience and not acquired by birth. In time, many teenage male drivers develop enough skills and experience that their driving risk factors substantially decrease, along with a correspondingly lower risk to insurance companies.

This is a far cry from other aspects of unlawful discrimnation factors which cannot be acquired by knowledge, experience or payment of $19.95. You are born of a specific gender, ethnic background, potential disabilities, etc., which you cannot change, notwithstanding Michael Jackson. Yes, religion is an exception to this but that’s because it apparently carries the same weighting factor in society as gender, ethnic background, etc. )

Now, to charge black drivers higher premiums just because they are black is unlawful discrimination. Period. But what if the empirical evidence showed black drivers had a much higher risk factor when it comes to driving? The evidence would provide the basis that higher premiums are justified when taking into account the statistical risk factors.

However, two problems with this.

  1. The risk factors are based upon learned behavior. This means an individual can change their behavior to reduce their risk. There is no evidence that blacks, or any other ethnic/racial group, as individuals, cannot change their behaviors, become better drivers and lower their insurance risks.

  2. Charging black drivers higher premiums just because they are black is unlawful discrimination. Period.

Now, do I support the contention I just illustrated:

But what if the empirical evidence showed black drivers had a much higher risk factor when it comes to driving? The evidence would provide the basis that higher premiums are justified when taking into account the statistical risk factors.?

No, because I am merely offering the opinion as a basis for debate.

In the end, what constitutes lawful vs unlawful discrimination is what society chooses to create for itself through their laws. Is it possible for some of these laws to fly in the face of what may be called “common sense,” a “gut feeling,” practicality, basic human rights, etc.? Yes. But that’s why we have a process through the courts to rule on the constitutionality of such laws. We have a system of checks and balances which should overturn legally constituted laws which should never have been passed in the first place.

So why should I have to pay more insurance costs, even though I have NO accidents and NO tickets on my record, than someone who has PROVEN him/herself to be more of a liability by getting into an accident or by getting multiple tickets? Because I’m younger?

I ask you, why is it legal to discriminate based on age simply because statistics show I am more of a liability because I’m under 25? If I were to find legitimate statistics showing that people of certain race/background were far more likely to be involved in shootouts with cops, by this logic it should be OK for cops to punish them without question, simply because they’re more of a liability? I can come up with other comparisons for just about anything.

Also, why is it ok for the government to accept and promote age discrimination by requiring people to be insured by those who would discriminate against them?

Yes. Statistically speaking, you’re a more significant risk to the insurance company. If your rate hasn’t gone down as you’ve gone longer without accidents/tickets, you should find a different company who will offer that sort of discount.


As was mentioned previously, age and race are apples and oranges. People change ages, but they don’t change races.

Just cause you can come up with a comparison doesn’t make it a good one.


Because in the right kind of accident, you can cause $500,000 worth of property damage (not to mention medical expenses), and someone has to pay for that. If it doesn’t come from the insurance company, you’ll have to pay it all out of your pocket. And that would take too long for you to pay it off–in essence, the people whose property you destroyed would be shouldering the cost while you amassed the funds to pay for it.


You’re certainly entitled to your opinion. And I agree that in its worst forms, age (and sex) discrimination is a pretty lousy thing. For example, conscription, where young men are uniquely forced to serve and risk death and serious injury.

Yeah, the movement would have been less successful. But arguably, if everyone were “black” for a few years, and then non-black afterwards, race discrimination wouldn’t be as bad a thing.
But it’s a question of values.

>> So why should I have to pay more insurance costs. . .

There is no way to explain it to you now that you would understand but just wait 25 years and it will become obvious. That’s what age does to you.

By the time you are old enough to realise your father was right you have a son telling you you are all wrong. Such is life.

Still, I recommend the threads I mentioned because the insurance business was discussed quite in depth and it was proved that charging everyone the same would lead to a spiral which would make it worse for everybody.

Not to change the subject (although this is related), but how do you feel about insurance companies “discriminating” based on credit score?

Many insurance companies (both auto and home) use your credit scores as another factor in assessing risk. According to the insurance companies, they do this becasue people with lower credit scores are more likely to commit insurance fraud (at least this is what they have found).

Therefore, two persons of the same age, with the same driving records, in the same local, may have different rates because one has a better credit report than the other.

If you want to borrow money, the lender must assess their risk that you will meet your obligations to pay it back on time and the full amount. For someone with no credit history, the risk to the lender is higher because you are an unknown.

As you become more involved in borrowing money, say for a car, credit cards, etc., the more you meet, or exceed your legal obligations to pay it back, the lower the risk to the lender. You build up a credit history.

Hence, the concept of a credit score. It is your financial reputation scorecard.

Is this “discrimination?” Yes. It is legal? Yes. Is this on par with gender discrimination, racial discrimination, etc.? It does not even come close.

Credit risk is based upon behavior. It can be measured. It is legal. It meets the merit factor standard.

Gender and racial discrimination are a whole different ballgame.