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Unfair Discrimination and Homeowners Insurance Availability: An Empirical Analysis


  • Laureen Regan

    1. Laureen Regan is associate professor, Department of Risk, Insurance, and Healthcare Management, Fox School of Business and Management, Temple University, Philadelphia, PA 19122; phone: 215-204-7264; e-mail:
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There has been an active public policy debate about the availability and cost of homeowners insurance in urban markets, and insurers have been charged with intentional discrimination, or redlining, against minority buyers and neighborhoods with a large proportion of minority population. Studies of relative price, loss costs, agency location, and product quality have attempted to determine whether insurers unfairly discriminate against minority homeowners in urban areas. This study focuses on insurance availability, and examines whether there is a systematic difference in the breadth of insurance coverage in the market that corresponds to the proportion of minority residents in a state. The market share of dwelling fire insurance polices across states for years 2000 and 2003 is analyzed, and evidence is presented that shows a positive correlation between the proportion of minority homeowners in a state and the share of more restrictive dwelling fire policies. However, this difference is not statistically significant once other risk-related and economic factors are included in the analysis.