Postcode prejudice and redlining here and across the pond


If you’re looking for cheap van insurance, guess what: you could end up paying through the nose just because you’re in the wrong postcode, my friend.

Rumours have been swirling forever about how insurers use arbitrary reasons such as your postcode to decide if you’re going to be offered affordable van insurance or car insurance or if you’re going to be slapped with a massive premium price. Well, new research has revealed that postcode prejudice is real and factual: the worst postcodes for high rates just happen to be grouped in Birmingham.

Did you happen to see that Channel Four documentary called Benefits Street? It was about how the number of Brits living on or near James Turner Street on the dole are through the roof – and it turns out that living in close proximity to Benefits Street, whether or not you’re receiving benefits, practically guarantees you insurance premium pricing so high as to be eye-watering. More than 20 per cent of the worst 100 British postcodes for high car and commercial van insurance premiums are within a stone’s throw of James Turner Street, so it doesn’t matter how conscientious a driver you may be: your postcode has sealed your fate.

For what it’s worth, I find a practice like this completely reprehensible on the part of insurers. Sadly it’s all too common – and not just here at home. American insurers do exactly the same thing. When it comes to US postcodes – known as zipcodes across the pond – American insurers intentionally carve out high rate areas by grouping zipcodes with a high concentration of lower socioeconomic classes together and charging them rates that are much higher. It’s known as redlining within the industry, and it’s akin to institutionalised discrimination, especially since so many of these zipcodes are home to not just low-income Americans but minority populations as well.

Yet somehow all of this is legal and accepted, both in the US and at home in the UK. I don’t see how this could possibly be just, but I also don’t see anyone else drawing attention to it or complaining about it. Who’s going to stand up to these insurers and tell them they can’t victimise people in this manner?

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