Redlining
Discriminatory exclusion or higher pricing based on where a consumer lives, often via geographic variables in underwriting and pricing models.
Redlining is the practice of denying services or charging higher prices to people based on the neighborhoods where they live. The term originated in banking and insurance, where maps were literally drawn to exclude minority neighborhoods. In modern insurance AI, redlining often appears through geographic variables, zip code, or credit data that correlates with race or ethnicity.
Digital redlining is the algorithmic version: a model that does not explicitly use race but produces worse outcomes for residents of certain neighborhoods. Regulators increasingly test AI models for these geographic effects, especially in home and auto insurance.
Carriers should screen geographic and credit-adjacent variables for protected-class proxy effects and document the results. See our glossary entries on proxy discrimination and disparate impact.