Fair-Housing Group Accuses Travelers of Bias

     WASHINGTON (CN) — Travelers denies insurance policies to landlords who accept housing subsidies, discriminating against low-income renters, an advocacy group claims in a federal complaint.
     Filing suit on May 17, the National Fair Housing Alliance accuses Travelers Indemnity and Travelers Casualty of using “discriminatory underwriting and eligibility criteria” in its commercial property insurance policies for city apartments.
     Refusing to insure any buildings that house tenants who pay their rent with federal Housing Choice Vouchers, otherwise known as Section 8, has “a disproportionately negative effect on the District of Columbia’s predominantly African-American neighborhoods,” according to the complaint.
     The alliance, an opponent of socioeconomic housing discrimination, says female-headed households suffer as well.
     Because these protected classes comprise the bulk of housing-voucher recipients in Washington, D.C., the complaint says Travelers’ ban against Section 8 has a “disproportionately negative effect” on low-income families.
     Travelers denied the allegations, making an exception of its policy not to comment on pending litigation.
     “It should be noted that we provide fair access to our insurance products,” Travelers spokesman Matt Bordonaro said in an email. “The level or source of income of a building’s tenants does not factor into our underwriting decisions for commercial building owners.”
     The alliance says it first learned of Travelers’ discriminatory underwriting practices in 2015. Having heard murmurs that various insurers refused to do business with Section 8-friendly buildings, the group allegedly sent employees to pose as insurance-seeking landlords.
     Five different D.C.-area brokers who received an undercover visit told alliance representatives that Travelers would not write policies for buildings with subsidized housing units, the complaint states.
     Several of these insurance agents referred to Section 8 as “a problem,” the alliance says, and one declined even to contact Travelers for a quote to “save time” after learning that the units in the hypothetical apartment building all accepted Housing Choice Vouchers.
     “Travelers doesn’t want any part of it,” another broker said, as quoted in the complaint.
     Agents allegedly informed the alliance’s undercover testers that their only option in procuring insurance for Section 8 housing was to purchase an inferior but more expensive policy from an “excess and surplus line carrier.”
     These insurance companies underwrite policies that large insurers like Travelers will not, the lawsuit says, but at a hefty cost — with higher premiums and a lower scope of coverage. A landlord would be “paying more for less” if forced to obtain such a policy, a broker allegedly told a NFHA tester.
     With such a steep decline in the price tag and quality from one insurance policy to the next, the alliance says Section 8 tenants are getting the short end of the stick, and the neighborhoods they typically populate are suffering because its buildings have been deemed nearly uninsurable.
     “Travelers’ refusal to write property and casualty insurance for landlords with tenants participating in the Housing Choice Voucher program is the equivalent of, and has the same effect as, a refusal to write insurance for landlords because they rent to a higher proportion of … African-American/Black or female-headed households,” the complaint says.
     In addition to an injunction against Travelers’ alleged discrimination, the alliance seeks punitive damages to deter similar conduct.
     The alliance notes that it expended funds on both the 2015 undercover mission and follow-up educational programs to raise awareness of the issue among affected black families and community leaders.
     Megan Cacace of Relman, Dane and Colfax filed the complaint for the alliance.

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