While claims disputes are hardly uncommon in the industry, many Black customers say they feel treated unfairly because of their race — something that Jeff Major, a Manhattan-based public adjuster who haggles with insurance companies on behalf of policyholders over their claims, has witnessed in his line of work.
“You can actually see a difference between a Caucasian family and an African-American, Hispanic or Asian family,” Mr. Major said. “It’s sort of known. It’s not spoken about. It’s a culture.”
A Tight Grip on Data
Insurers keep a tight lid on their policy sales and claims data. They have long argued that the size and timing of payouts, and the neighborhoods where claims are registered and addressed, are proprietary information, and that sharing that data would hurt their ability to compete. They guard it so zealously that even most regulators don’t have detailed information about how insurers assess individual claims.
Michael Barry, a spokesman for the Insurance Information Institute, a trade group, said that claims data was private because payouts were considered “losses” and that revealing them would put insurers “at a competitive disadvantage to each other.”
Where data is publicly available, such as auto insurance, researchers have found that policies discriminate against Black drivers by charging them higher premiums. But homeowners’ insurance has been opaque.
It can be hard to compel insurers to part with data, partly because they are regulated by states and not the federal government. For example, federal laws that outlawed redlining for banks after the civil rights movement don’t apply equally to insurers. And as of 2014, 17 states had no bans on race-based discrimination by insurers, a group of university researchers found.
In late September, the Federal Advisory Committee on Insurance, whose members include top executives from the nation’s biggest insurers, voted down a proposal to study racial bias in the industry over concerns that the study would muddy the distinction between the legitimate discretion insurers have to question claimants’ assertions and unfair bias.
