MOTORISTS living in areas with a high proportion of ethnic minority residents including Blackburn and Burnley face higher prices for their car insurance, a study suggests.

According to data analysts Webber Phillips people face an ‘ethnic penalty’ and could be paying £279 more than the average.

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However, the study has been met with scepticism by former Blackburn MP Jack Straw who said London, which has a high proportion of ethnic minorities, has lower premiums than the north west.

The report, which was commissioned by Thompsons Solicitors, claims the ‘process of premium setting has definitely produced an inequality of outcome to the detriment of black and ethnic minority groups’.

The variations cannot be explained by crime, level of claim of fear of crime, according to Doug Christie, of Thompsons Solicitors.

He said: “In quarter one of 2016, the average car insurance premium in Blackburn and Burnley was £831.37.

“People living in the BB postcode are paying £279 more than the average UK car insurance premium of £552.

“According to Webber Phillips data, the proportion of black and ethnic minority households in Blackburn is 23.62 per cent.

“While insurers have been pumping out stories blaming consumers and a compensation culture for increased premiums, this research highlights that something else is going on.

“Based on published data, the ethnic penalty cannot, according to the report, be explained by issues such as crime, level of claims or even a fear of crime.”

Mr Straw said there is a problem with postcode discrimination, but he had not seen any direct evidence it is to do with ethnic discrimination.

He said: “London which has a high proportion of ethnic minorities typically has lower insurance premiums than urban areas in the north west.

“It goes back to the fact they have a high proportion of whiplash claims. These are a particular character in the urban areas.

“One issue is that lawyers have been pushing whiplash claims which pushes up premiums. When that happens people in the given postcode area will then find that everybody in that area is subject to what amounts to a penalty for the poor claims records of some people.”

Mr Straw said it needs to be made impossible to make trivial whiplash claims. He added Thompson Solicitors “has a vested interest” in maximising claims.