About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline

LOG IN
LOG IN


16 Colum. J.L. & Soc. Probs. 1 (1980-1981)
Insurance Redlining and the Future of the Urban Core

handle is hein.journals/collsp16 and id is 11 raw text is: Insurance Redlining and the Future of the Urban Core David I. Badain* I. INTRODUCTION Few services are as important to modern society as property insurance. The pooling of loss experience by the insurance industry counteracts the individual's inability to predict catastrophic loss and spreads risks throughout society. The collection of premiums enables insurance companies to become the conduits through which property owners, who individually lack resources, can re- build in case of loss. Because property insurance is a prerequisite for the credit upon which our society is based, it is a necessity for residential and business property ownership. Thus, insurance is a social good essential to personal security and community growth' and the industry has become among the most regulated in our economy.2 The problem of property insurance unavailability is not one which randomly affects isolated individuals but rather strikes at residents of older urban communities.' Since the mid-1960s, the public has grown more cognizant of the relationship between the unavailability of property insurance and urban decline. Precipitat- ing this awareness were the riots that shook Detroit, Newark, Los * This article is based on a paper written by the author, a staff member of the COLUM. J.L. & Soc. PROS., and Melanie N. Aska, New York University Law School 1983, during their graduate studies at the Woodrow Wilson School of Public and International Affairs, Princeton University (Spring 1979) and a policy memorandum on insurance redlining writ- ten by Ms. Aska for Robert C. Embry, Jr., Assistant Secretary for Community Planning & Development, U.S. Dep't of Housing & Urban Development (August 1979). Ms. Aska collab- orated on earlier drafts of this article until March 1980. 1. U.S. COMPTROLLER GENERAL, ISSUES AND NEEDED IMPROVEMENTS IN STATE REGULA- TION OF THE INSURANCE BUSINESS 143 (General Accounting Office, 1979) [hereinafter cited as GAO REPORT]. 2. The purposes of regulation are four-fold: to monitor the financial health of the in- dustry; to maintain public confidence through minimizing the risks of insolvency; to ensure that rates are neither excessive nor inadequate; and to prevent unfair discrimination. Id. at 13-14. This regulation has traditionally been a state function (see notes 92-105 and accom- panying text infra) and has come under increasing attack by both the industry and its crit- ics in recent years. 3. ILL., IND., MICH., MINN., OHIO, & Wis. ADVISORY COMMS. TO THE U.S. COMM'N ON CIVIL RIGHTS, INSURANCE REDLINING: FACT NOT FICTION 1 (1979) [hereinafter cited as MID- WEST CIVIL RIGHTS ADVISORY].