A public-interest group charged Wednesday that Kemper National Insurance Cos. discriminate against black and Hispanic drivers in the Chicago area by charging them more for insurance than white customers.
The allegation was made by Illinois Public Action as the result of a study it conducted of premiums paid by two-car families from more than 250 Chicago and suburban neighborhoods.
A Kemper spokesman claimed that the study was the product of sloppy research and that the company bases its rates on so-called loss costs-what it stands to pay in claims-in a particular area and not on the ethnic background of customers.
“Poverty has nothing to do with it,” said Chuck Johanns. “It has to do with what the costs are of delivering insurance.”
William McNary, legislative director of Illinois Public Action, said the study found that in most Chicago neighborhoods where more than half the residents were minorities, those people paid more for Kemper insurance than residents of largely white areas.
On average, suburban communities paid nearly 50 percent less than their city counterparts, according to the study. In communities where more than half of the residents were minorities, premiums were as much as $160 a year more than in suburbs where more than 80 percent of residents were white, McNary said.
Kemper said it could match the examples with nearly as many of its own, saying there are minority residents who pay less than those in largely white neighborhoods.
Johanns said Kemper’s share of the automobile insurance market in the state is so small-a half of a percent-that any such study is of questionable value.
