Monisha J. Brown: Welcome to the Business Exchange with rolling out. I am so glad to be here today with one of the best in the insurance world. I am your host today, Monisha J. Brown.
I am here with the guy who does a little bit of everything. He is a business mogul. He is the “King of Insurance.” He is a political strategist. He ran for Georgia’s Insurance and Fire Safety Commissioner’s seat in 2022, garnering an amazing -as a first-time candidate-220,000 votes, which forced a runoff. He is known for having a passion for people. He was also awarded the Presidential Lifetime Achievement Award in 2022 by President Joseph R. Biden. I am very proud to introduce you to one of my really good friends, Raphael Baker.
Raphael Baker: Oh my goodness. Thank you so much, Monisha, for that warm welcome. I’m very happy to be here.
Monisha J. Brown: You know what? We talk all the time. I just want to say thank you for opening the door for our conversation to be recorded for our rolling out family. Again, I mentioned that you are known for having a passion for the people. Everything you do is about people. That’s one of the many things I love about you– your heartbeat. So, when we talk about insurance, some disparities in the insurance world are not really for the people. Unpack that for us?
Raphael Baker: Okay, yes. When you think of insurance, your mind doesn’t go to disparities and inequities. But, unfortunately, in many states, especially Georgia, there are a lot of inequities and disparities when it comes to insurance rating.
For example, some recent studies reflect how people in certain zip codes pay more for car insurance than others. Specifically, the study revealed that Black people and people residing in Black communities pay more than their counterparts in other communities.
Monisha J. Brown: How is this even legal or possible? It sounds like a disparity; but, at its core, it just sounds like a prejudice.
Raphael Baker: Right. We know that it is a prejudice; but, it is similar to redlining. If you remember, redlining occurred within the real estate industry. Zip codes are one of the factors that go into the insurance ratings. Even deeper than zip codes, there are socioeconomic factors that impact your rates which have nothing to do with your driving record.
When you get a quote for car insurance, you automatically think that if I have a clean driving record, no tickets, and no accidents, I should get a good rate. Well, that is not so. Some factors go into the quoted rate which has nothing to do with your driving record.
One example is your marital status. If you are single, you will pay more than someone who is married. Your quoted rate will depend on whether you own a home or not. Renters pay more for car insurance than homeowners. Your credit score is factored into the quoted rate as well. These are some factors that have nothing to do with how you drive. Again, you can have a pristine driving record, and you may still pay more than someone else. Those factors disproportionately impact the Black community.
Monisha J. Brown: What do we do about that? We see that it marginalizes particular community members. Is there a government agency where we can go to voice our concerns or make a change?
Raphael Baker: This is one of the reasons I ran for insurance commissioner. As you mentioned, I have a passion for people. The insurance commissioner in Georgia regulates all things insurance. So, all these rating factors have to be approved by the insurance commissioner. Rate increases or decreases must be approved by the Department of Insurance. The buck really stops there.
Other entities have a hand in this decision as well. We have our state senators and our state representatives whom we need to poke and prod to say, “Hey, this is what is going on. This isn’t fair.” We need to change these laws because, unfortunately, even a lot of them are ignorant about the rate disparity. They don’t know what’s going on. So, we must continue illuminating this message to our lawmakers.
Monisha J. Brown: Is there an example of a state managing insurance rates equitably so we are not marginalized?
Raphael Baker: Yes. For example, California removed credit scoring. Even if we can remove a couple of those socioeconomic factors, drivers in the Black community would see relief. We are not going to dismantle this entire system in one day; but, we can break it down piece by piece.
Monisha J. Brown: How do we find the disparities? Is this information published somewhere or is it a matter of exchanging notes with our friends? How do we put transparency into the process?
Raphael Baker: Usually, that would start with your Department of Insurance. You can review the different rate filings. There is also the Open Records Act which you can file to request rate information in your state.
Another good solution is to talk. Talk to your community members and talk to your insurance agent. A lot of agents will tell you that your rates have increased because of your zip code. I encourage you to find an insurance agent that will go deeper than that.
Monisha J. Brown: While we are waiting for change to occur in Georgia’s legislative system, what are some action items we can take to, possibly, lower our insurance rate?
Raphael Baker: I am so glad you asked that because I love saving my clients money. One of the biggest ways you can save is to take advantage of discounts.
One of those discounts is the bundling discount. If you have auto insurance, bundle something else with it such as homeowner’s insurance, renter’s insurance, condo insurance, or life insurance. You will often receive a discount if you have life insurance, too. And, hello people, make sure you have life insurance because your life is your most valuable asset.
A lot of people get the minimum liability limits on their auto insurance policy to save money. However, that will cost you more in the long run because the insurance companies view you as irresponsible for just maintaining the state minimums.
I encourage you to have your minimums raised. You will, typically, pay no more than $20 additional on a six-month policy. However, this step will set you up for success when you shop around after your renewal. The insurance company will see you as responsible for carrying a higher minimum liability. You will be viewed as a driver who cares about protecting assets, and you will get discounts.
One more great discount with auto insurance is Telematics. Technology is growing, and it impacts all industries. The insurance industry is not exempt. Telematics is a way for insurance companies to track your driving patterns such as hard breaking and speeding.
Many people are afraid to use tracking technology because they are driving crazily. However, if you have the technology tracking your patterns, you will be more cognizant of how you drive. You will help to mitigate accidents and claims. Plus, you will receive a discount for using the technology. Discounts. Discounts.
Monisha J. Brown: I appreciate that. You are the “King of Insurance.” If someone wants to find you, how can they find you, Raphael?
Raphael Baker: I am everywhere on social media as “The Raphael Baker.” The website for my insurance agency is: www.kingofinsurance.net. If you visit the site, all the links to my social media handles are there. I would love to connect with you, answer any insurance-related questions and any inquiries about how I can advocate on your behalf.
Monisha J. Brown: Thank you, Raphael Baker, the “King of Insurance.”
Raphael Baker: Thank you, Monisha. Thank you, rolling out!
