Photo: Raphael Orlove

Living in Detroit, I learned quickly about the racket that is auto insurance in the city. There’s a cottage industry for one-week premiums, and if you want a steady monthly plan, it can cost hundreds of dollars per month. Many see it as a modern-day form of redlining. A new report from ProPublica and Consumer Reports shows just how true that might be.

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ProPublica and Consumer Reports teamed up to conduct what it says is the first-of-its-kind analysis of auto insurance premiums in minority and white neighborhoods in California, Illinois, Texas, and Missouri. The disparities are stark, according to the report.

In some cases, insurers such as Allstate, Geico and Liberty Mutual were charging premiums that were on average 30 percent higher in zip codes where most residents are minorities than in whiter neighborhoods with similar accident costs.

Our findings document what consumer advocates have long suspected: Despite laws in almost every state banning discriminatory rate-setting, some minority neighborhoods pay higher auto insurance premiums than do white areas with similar payouts on claims. This disparity may amount to a subtler form of redlining, a term that traditionally refers to denial of services or products to minority areas. And, since minorities tend to lag behind whites in income, they may be hard-pressed to afford the higher payments.

I don’t want to give too much away because what you should be doing is grabbing an afternoon cup of coffee to enjoy while reading the excellent piece here.