Opinion / Economic Justice — Insurance Series: Part 1 of 5
Louisiana’s insurance industry charges Black neighborhoods more for auto insurance than white neighborhoods with identical risk profiles. The rates are not based on how you drive. They are based on a calculated bet that you cannot prove they charge white people less.
| TL;DR — THE SHORT VERSION Louisiana’s insurance industry charges Black neighborhoods more than white neighborhoods for the same coverage and the same risk. ZIP code pricing is not a law — it is a choice three states have already banned. This article exposes how the system was designed, who profits from it, and what every Louisiana family needs to know to fight back. |
| KEY POINTS • Louisiana drivers pay the highest auto insurance rates in the nation — $3,849/year, 53% above the national average • Black neighborhoods pay significantly more than white neighborhoods with identical driving records and risk profiles • ZIP code pricing is not a requirement — California, Maryland and Massachusetts have banned it. Louisiana has not. • The industry profits most from poor communities because those communities are least likely to be able to prove the discrimination • Louisiana home insurers denied 44.6% of claims in 2024 while posting the 3rd highest underwriting profits in the country • Seven specific reforms would fix this — Baton Rouge has blocked every one of them |
The insurance rates in Black neighborhoods across Louisiana are not high because Black drivers are riskier. They are high because the insurance industry discovered decades ago that poor communities — communities with less political power, less legal access, and less institutional knowledge of how the system works — are the easiest communities to overcharge.
Related: Convicted Lawyers Stole From You Every Time You Drove
This is not a conspiracy theory. It is a documented business strategy. And it works because most people never find out it is happening to them.
Two numbers. Hold them at the same time. The average Louisiana driver pays $3,849 a year for full coverage auto insurance — 53 percent above the national average, the highest in the South. Meanwhile Louisiana incomes run roughly $16,000 below the national average. We pay the most. We earn the least. The people paying the steepest rates are the ones who can least afford them.
The industry calls it “risk-based pricing.” They will show you actuarial tables. They will say this is math, not discrimination. The math is real. What it is measuring is not.
“They are not charging you more because you are a bad driver. They are charging you more because they have calculated that you lack the resources, the data, and the lawyers to prove they charge white people less.”
— Jeff Thomas, Black Source Media
The Con Depends on You Not Knowing How the System Works
Here is the part the insurance industry never advertises: ZIP code pricing is not some industry standard based on data. It is a choice. States can ban it. Three already have. California banned ZIP codes as a standalone rating factor decades ago. Maryland and Massachusetts followed. In those states, a Black driver in a poor neighborhood and a white driver in a wealthy one with identical driving records pay rates far closer to each other than they do in Louisiana.
Louisiana has not banned it. Louisiana has not even seriously debated banning it. The insurance industry spends significant money every legislative session ensuring that conversation never gets far enough to threaten their profit margins. But change may be coming. This session, Senator Royce Duplessis introduced Senate Bill SLS 26RS-558, which would prohibit insurance companies from using credit profiles and ZIP codes to determine what they charge. Senator Duplessis has consistently brought legislation that directly benefits our neighborhoods. This bill deserves your attention — and your support.
But the insurance companies have a winning strategy. The strategy works because most policyholders do not know that ZIP code pricing is optional — that other states rejected it, that ProPublica proved it discriminates, and that the only thing standing between Louisiana families and fairer rates is a legislature that has chosen the industry over the people every single time. Thank you Sen. Duplessis for standing up for our communities.
But, you were never supposed to know any of this. Because an informed consumer is a dangerous consumer. An uninformed one just pays the bill and renews.
“An informed consumer is a dangerous consumer. The industry built this system counting on you to be neither.”
Why Black Neighborhoods Pay More for Car Insurance When the Risk Is Identical
ProPublica investigated this directly. Researchers built identical driver profiles — same age, same driving record, same vehicle, same coverage — and compared what insurance companies charged based solely on ZIP code. Minority neighborhoods paid significantly higher premiums than white neighborhoods with identical or even worse claims histories.
A Black driver in New Orleans East with a spotless record pays more than a white driver in Metairie with the same spotless record. Not because the Black driver is a worse risk. Because the Black driver lives on the wrong side of a ZIP code line that insurance companies drew themselves.
This is the modern version of redlining — the practice the federal government outlawed in the 1960s. The original version refused mortgages and insurance to entire Black neighborhoods regardless of individual creditworthiness. The insurance industry responded by replacing race with ZIP code. The neighborhood is still the target. The mechanism just got laundered through a spreadsheet.
| The Louisiana Insurance Numbers the Industry Doesn’t Advertise • Louisiana drivers pay the highest auto insurance premiums in the nation — $3,849/year • Louisiana incomes run $16,250 below the national average — we pay the most and earn the least • Auto insurers in Louisiana post the 3rd highest underwriting profits in the country • Louisiana home insurers denied 44.6% of claims in 2024 — significantly above the national average • State Farm paid a $5 billion dividend nationwide in 2025 including $136 million back to Louisiana drivers • Three states banned ZIP code pricing. Louisiana has not. That is a political choice, not an economic necessity. |
How the Industry Built a System That Profits Most From the People With the Least
Insurance companies set rates using ZIP codes, credit scores, occupation, and a constellation of factors that correlate tightly with race and income. Poor credit? Higher premium. Dense urban neighborhood? Higher premium. Older car? You pay more to insure something worth less. Every factor punishes poverty. And poverty in Louisiana carries a Black face.
A study by the Consumer Federation of America found that people with poor credit pay over 77 percent more on average for homeowners insurance. The family recovering from a hurricane — which disproportionately devastates Black and brown communities — pays a penalty on top of everything else. The system punishes you for being poor and then penalizes you for the consequences of being poor. It is circular by design.
Since 2004, Louisiana home insurers made $55 in profit for every dollar they lost in underwriting. These companies do not struggle in Louisiana. They feast here.
“They charge the most from the people who have the least. Then they deny nearly half the claims. That is not a market. That is an extraction.”
— Jeff Thomas, Black Source Media
What Louisiana Insurance Reform Must Look Like
The Louisiana Legislature opened its 2026 session this month. The bills currently filed do not go nearly far enough. Extending cancellation notice periods from 30 to 60 days is the equivalent of asking a pickpocket to slow down. Real reform shifts power from the industry to the people paying the bills.
| 7 Reforms That Would Actually Fix Louisiana’s Insurance Crisis Ban credit scores as a rating factor. California, Maryland, and Massachusetts already did it. Credit history punishes poverty, not risk. Require ZIP code pricing transparency. Publicly disclose what insurers charge, pay out, and profit by census tract. Cap the ZIP code premium differential. No neighborhood pays more than a set percentage above the state average for identical coverage. Mandate a minimum claims payment ratio. State Farm’s $136 million refund to Louisiana drivers in 2025 should be law, not charity. Create a state-subsidized low-income auto insurance program. California’s costs under $400/year. Louisiana needs this more. Prohibit post-disaster claim denial patterns. Auto-audit any insurer denying more than 30% of claims in a declared disaster area. Strip market access permanently from serial bad actors. Collapse after moving assets to affiliates? Lose your Louisiana license. Forever. |
This Is Connected to Everything Else in New Orleans
High insurance costs are driving people out of New Orleans. Between 2020 and 2023 the metro lost approximately 34,000 residents. Roughly 18 percent of home sales under contract canceled in February 2025 because buyers could not secure affordable coverage. The neighborhoods absorbing the worst of it are New Orleans East, Gentilly, and the Lower Ninth Ward — communities that rebuilt after Katrina when the world told them to walk away.
The insurance industry did not cause the storm. But it profits from the aftermath and charges the survivors the most for the privilege of remaining.
“The people who rebuilt New Orleans after Katrina now pay the highest insurance rates in the nation. That is not risk pricing. That is punishment.”
Tort Reform Did Not Help You. The Industry Kept Every Dollar.
To give Governor Landry his due — he came into office wanting to help. In 2024 he actually vetoed tort reform backed by the insurance industry, saying he did so to protect working people. But by May 2025 he had reversed course, signing six tort reform bills and declaring them “the boldest insurance reforms in Louisiana history.” The industry had made its case. Landry believed them.
The rates did not fall. Insurers filed for additional increases. And Landry and independently elected Insurance Commissioner Tim Temple — who answers to Louisiana voters, not the governor — began publicly contradicting each other over who deserved credit for a crisis neither had solved.
Landry may have genuinely believed tort reform was the answer. If so, the industry sold him a bill of goods. Black families in New Orleans East, Baton Rouge, Lake Charles, and Shreveport are still paying the price. The question now is whether he is willing to acknowledge that tort reform alone was not enough and fight for the structural changes that would actually help the people opening their renewal notices across this state.
Every session, insurance lobbyists fill the hallways in Baton Rouge. Every session, consumer protections die in committee. And every session, families in New Orleans East open their renewal notices and wonder how they will manage.
Mayor Moreno’s first major test at the state capitol is the 2026 legislative session. She knows those hallways and those votes. She has already demonstrated — with the airport master plan, with her RTA overhaul — that she can build coalitions and move large institutions. The insurance industry has extracted enough from the poorest people in this city.
Your ZIP code is not your risk profile. It is your address. No one in Louisiana should pay a poverty tax on top of every other burden they already carry.
And the first step to fighting back is knowing it is happening. Now you do.
*This is Part 1 of a five-part series on insurance discrimination in Louisiana. Next week part 2 examines accident rate data by race and dismantles the industry’s core argument.
Jeff Thomas is a contributor to Black Source Media covering New Orleans politics, civic affairs, and economic justice. Published every Sunday. | Sources: ProPublica; Consumer Federation of America; Real Reform Louisiana / Weiss Ratings 2025; Louisiana Department of Insurance 2025; Big Easy Magazine 2025. | blacksourcemedia.com