An Arizona insurance company that charges higher homeowner's insurance premiums or refuses coverage based on the racial composition of the neighborhood is engaging in:
Why Redlining—illegal discrimination in insurance based on protected class characteristics of the area Is Correct
Answer B: Redlining—illegal discrimination in insurance based on protected class characteristics of the area
Exam Tip: Fair Housing
Fair Housing questions test both federal (Fair Housing Act of 1968) and state-level protected classes. The federal protected classes are race, color, religion, national origin, sex, familial status, and disability. Many states add additional protections.
Key Fair Housing Terms in This Question
The highest legal duty an agent owes to a principal — requiring the agent to act in the principal's best interest above all others.
RedliningAn illegal practice where lenders or insurers deny services or charge higher rates in certain neighborhoods based on the racial or ethnic composition of those areas.
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Key Terms to Know
An illegal practice where lenders or insurers deny services or charge higher rates in certain neighborhoods based on the racial or ethnic composition of those areas.
Fair Housing ActFederal law prohibiting discrimination in the sale, rental, or financing of housing based on race, color, national origin, religion, sex, disability, and familial status.
SteeringAn illegal practice where a real estate agent directs buyers toward or away from certain neighborhoods based on the buyer's race, religion, national origin, or other protected characteristics.
BlockbustingAn illegal practice of inducing homeowners to sell by claiming that the entry of minority groups will lower property values.
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