Chicago remains one of the most highly-segregated cities in the United States, which makes it relatively simple to associate where one lives with one's race and allows companies to discriminate against a person based on their perceived "zip code" race. In support of this notion, ProPublica and Consumer Reports recently published an article discovering that while the cost to insurers wasn't significantly higher, those living in minority zip codes were charged significantly higher rates for their car insurance. To quote the article:
In Illinois, we found that premiums were much higher on average in minority zip codes compared to non-minority zip codes with similar risk. In fact many insurers' rates showed little association to risk.
While someone's location can certainly impact risk when calculating insurance, the disparities shown are simply abusive. And this is all data that is volunteered in a car insurance application.
The May 2014 FTC report "Data Brokers: A Call for Transparency and Accountability" also outlined risks to consumers from being grouped into misrepresentative marketing data segments when insurance companies calculate premiums. For example, someone may be subscribed to a motorcycling magazine, which could lead an insurance company to believe they're at a greater risk of risky behavior, raising that person's rates. This whole transaction happens hidden to the customer. We are able to see our credit reports to verify accuracy of the data there, but marketing data that may be collected without our knowledge carries as much impact and receives no personal oversight.
Geolocation data presents another frontier to categorize users. The GPS systems in our smartphones drive amazingly powerful new means of interacting with the world, however, if that data is stored and shared beyond what the user intended it for, it can have far-reaching consenquences. As noted in the ProPublica and Consumer Reports article above, zip codes are commonly used as proxies for race because it easily identifies where someone lives. Without more transparency on the collection, use, and selling of personal geolocation data, it becomes easy for insurers and others to use neighborhoods as proxies for race by simply obtaining such data elsewhere, thus perpetuating the unfair treatment of already disadvantaged communities.
Fortunately, statehouses across the country continue to step-up in lieu of the federal government's rollback of our basic fundamental rights. In Illinois, State Senator Jacqueline Collins is making a clear effort to remove zip codes from insurance applications while Representative Ann Williams pushes to enact HB 3449, the Geolocation Privacy Protection Act, which aims to give Illinois citizens control over their location data. In Nevada, Assemblyman Jim Wheeler introduced AB 313 and Alaskan Senator Costello Dunleavy introduced SB 177, both of which are similar to the Geolocation Privacy Protection Act and would provide the same basic protections to Nevada and Alaska citizens. Protections like these are a good, solid first step towards ensuring that the data collected about you won't be used to discriminate against you.
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