For the past several decades, I have been an active pastor in the African Methodist Episcopal Church, serving fourteen congregations across Los Angeles County. It is impossible to overstate the importance of Black-owned businesses in these communities. They are the lifeblood of local commerce, but more than that, they are a means to local organization and empowerment.
I have seen firsthand the struggles of these business owners to succeed—to meet their payrolls, to support their families, to always be there for their customers. It’s not always easy, especially in the wake of a year-long pandemic, and every dollar matters.
That’s why I’m strongly opposed to new proposed rules by California Insurance Commissioner Ricardo Lara that would eliminate group car insurance discounts that save small businesses, including minority-owned businesses, hundreds of dollars every year.
When they can, small business owners bind together in community through their trade associations to reduce expenses and improve efficiency. One such example is purchasing discounted car insurance through their associations. For decades, this practice has been saving small business owners hundreds of dollars a year, which can be pivotal, especially for businesses like restaurants that have been hard-hit by the pandemic.
As a lifelong advocate for civil justice, I remember when redlining — the practice in which insurance rates were heavily influenced by the ZIP code in which drivers lived —was widespread. It was a discriminatory practice that raised prices for good drivers in Black and minority communities for no reason other than where they lived.
That’s been fixed. California law now strongly protects against discrimination in auto insurance rates by establishing a person’s driving record, years of driving experience and miles driven each year as the key factors in determining rates. It also permits affinity group discounts, allowing insurance companies to group together drivers of similar professions who are proven to be of lower risk, be they teachers, nurses, firefighters, or local merchants, to name a few. Often, the discounts are offered through organizations such as a labor union or trade associations such as the California African American Chamber of Commerce.
The Commissioner’s motivation is commendable; his stated goal is to find ways to extend these discounts to drivers in low-income communities. However, his proposal would actually have the opposite effect – it would impose costly and onerous new rules that would actually eliminate group discounts altogether, hurting many low income and communities of color that he wants to help.
It’s been a very tough year for local businesses in California and across the nation. The pandemic and restrictions on shopping and gathering have taken a heavy toll. We have seen the government respond with loans to businesses and stimulus checks to put money in the hands of consumers. Our policies in California are focused on getting people back on their feet and preserving our small businesses—so why is the California Department of Insurance set on a path that will achieve the opposite?
It makes no sense to take away a longstanding discount that is helping hard-working folks, many of whom are providing essential services in these same communities, make ends meet.
Our Black-owned businesses are vital to our communities. As California fights to reopen and return to normal, the last thing these small businesses need is to incur higher costs. I urge the California Department of Insurance to reconsider their proposed regulations. While I support building a more equitable playing field for all insurance customers, it must not come at the cost of successful programs such as affinity groups.
The Rev. Norman Copeland served as pastor of fourteen African Methodist Episcopal churches during his long ministry, including Ward AME in Los Angeles, Grant AME in Long Beach and St. Paul AME in San Bernardino. He retired in October 2018. Since then, he has involved himself with philanthropic causes, most notably as founder of the nonprofit, HOPE for All, and a board member for the parent organization, the Joshua Generation Community Development Corporation.