A victory in fight against insurance redlining.(View point: the consumers union perspective)

Many consumers never have to think of doing without insurance for their homes, cars, of businesses. Yet low- and moderate-income communities and communities of color tend to lack access to these essential coverages, according to consumer groups, governmental agencies, and community leaders. A recent landmark decision by the California Supreme Court--in a case where Consumers Union, publisher of CONSUMER REPORTS, and other parties intervened--may go a long way toward ending insurance redlining and ensuring equal access to basic insurance.

An insurance company "redlines" when it refuses to write policies in particular geographical areas--typically minority, low-income, or inner-city areas--or when it varies the terms, conditions, or amount of coverage offered in those areas. Since 1994, California has had model regulations that require insurers to file annually certain data about where they are and are not writing homeowners, automobile, and commercial policies. These "community service statements" disclose the numbers of policies and premiums in each ZIP code in California, as well as new, canceled, and nonrenewed policies. The filings do not reveal individual policyholder information.

(A leading insurer's internal memoranda, according to a 2001 Wall Street Journal report, disclosed that when statutes were enacted in the 1960s to prohibit insurers from using race as a rating factor, that insurer began practicing neighborhood-based "area underwriting.")

When Consumers Union and several other groups requested copies of the filings of the nation's largest insurers in 1999, the insurers sued, claiming that the data were their "trade secret." The California Supreme Court ruled that California lave requires these community service statements to be made public. When those data become available soon, CU will let our readers know and will obtain and analyze the data. Researchers and the public will be able to assess the levels of discrimination in underserved areas, and ...