Agenda - 04-15-2008-3d - Laserfiche WebLink

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Orange County, North Carolina - AIFCH - 2007 in more expensive policies. The plaintiffs alleged that Allstate had violated both federal civil rights and housing laws by engaging in a pricing practice that was racially discriminatory because of its disparate impact on minorities. Disparate impact claims involve procedures that are not intentionally discriminatory but result in discrimination. 10.3 Recent Lawsuits That Impact Homeowners Insurance Practices A lawsuit filed in the late 1990s against Citigroup, Travelers Property and Casualty and Aetna Casualty & Surety in federal district court in Washington, D.C., alleged that the companies engaged in pervasive discriminatory practices and maintained underwriting standards and policies that restrict, limit or deny homeowner's insurance in predominantly Black, Latino and integrated neighborhoods in the Unites States. The suit was brought by six nonprofit fair housing agencies from various areas of the United States. Using testing and investigational techniques, the plaintiffs identified policies, practices and underwriting standards that severely limited or denied insurance coverage needed to repair, replace or rebuild homes located in older neighborhoods that were Black, Latino or integrated. In addition, fair housing and community groups placed Travelers and Aetna on notice regarding their discriminatory policies in the late 1970s. State Farm, Nationwide and Mutual are three other companies that have run afoul of fair housing laws. All of these insurance companies settled their lawsuits and have since changed many of their policies on a national level, including in Orange County. Some of the illegal practices found in these investigations included: • Charging Blacks more for the same coverage or offering inferior coverage ® Requiring additional background information from applicants in minority or low-moderate income neighborhoods ® Offering Whites replacement cost coverage, but denying it to Blacks ® Maintaining minimum age restrictions and minimum value restrictions • Requiring inspections of homes in minority neighborhoods more frequently • Referring callers from minority neighborhoods to other insurance companies 10.4 Location of Agents A critical factor in the marketing of insurance is the location of offices/agents. A majority of the policies sold by most agents are to insure properties in neighborhoods in which the agent is located. Studies have shown that the distribution of agent locations is clearly related to the racial composition of neighborhoods. We used the local Orange County telephone book and the Yellow Pages at yellowpages.com for communities within the County to determine location of insurance offices. 37