Travelers Insurance Must Face Suit Over Section 8

WASHINGTON (CN) — The National Fair Housing Alliance has standing to bring a discrimination claim against Travelers Insurance under the Fair Housing Act, a federal judge ruled.

The alliance had brought its suit in Washington, accusing Travelers Indemnity Co. of racial, sexual and source-of-income discrimination for failing to provide insurance to apartment owners renting to tenants who participate in the federal Housing Choice Voucher (HCV) program, commonly known as Section 8 vouchers.

Alleging violations of the Fair Housing Act and the District of Columbia Human Rights Act, the alliance said Travelers’ policy hurts black folks and women hardest, particularly families living in predominantly black neighborhoods east of the Anacostia River in Washington.

“Ninety-two percent of HCV-participating households in the District are African American and 81 percent are female-headed households,” the alliance says on its website. “Residents who participate in the HCV program are largely concentrated in four census tracts east of the Anacostia River. These tracts are 84.7 percent black, compared to the D.C. average, which is 51.1 percent black.”

Travelers moved to dismiss, but U.S. District Judge John Bates refused Monday.

Bates found that the alliance’s claims meet the “robust causality” requirement under the U.S. Supreme Court’s Inclusive Communities Project decision of 2015, because NFHA sufficiently alleged that Travelers’ policy disproportionately harms the groups most likely to participate in the HCV program.

The alliance sufficiently pleaded that because these groups are over-represented among Section 8 participants, “members of a protected class are more likely to be harmed by Travelers’ policy than are other individuals” in the District of Columbia.

He also found that the alliance adequately alleged that Travelers’ policy violated the D.C. Human Rights Law’s prohibitions on housing discrimination based on source of income.

In its motion to dismiss, Travelers attached an affidavit stating that since Jan. 1, 2016, it no longer uses the policy. The alliance meanwhile offered evidence demonstrating that in February 2016 Travelers was still using the policy in the District of Columbia.

Bates found that factual dispute worthy of further litigation. “Travelers’ admission that it used this policy prior to January 1, 2016,” the opinion states, “will likely bolster NFHA’s claims at a later stage of this litigation.”

An official at the alliance spoke out against the insurer in a statement. “Travelers’ practices and underwriting guidelines have a discriminatory impact on the district’s most vulnerable households,” said alliance CEO Shanna L. Smith. “Everyone knows how hard it is to find safe and decent affordable housing in D.C. So denying insurance to housing providers simply because their tenants use vouchers exacerbates the problem for African Americans, and especially for African American women with children.

“The Housing Choice Voucher program is funded by Congress to increase choice in neighborhoods across the District of Columbia and the nation. Travelers has effectively reduced the opportunity for families to exercise neighborhood choice.”

Investigators with the alliance contacted five independent insurance agencies that represent Travelers in the D.C. area, and found that despite assurances by Travelers, it continued to deny policies for insurance to buildings occupied by HCV participants.

According to the judge’s case summary, investigators contacted five brokers. One of them, who was not told initially that the property was occupied by voucher recipients, told the investigator he had spoken with a Travelers’ representative and quoted a policy premium between $3,000 and $3,500. But when the investigator told the broker that the building was occupied by tenants using vouchers, the broker responded: “Wait a minute. Stop right there. Subsidized housing is a problem.”

The housing alliance said in a statement: “Travelers has known since at least 2013 that denying insurance to apartment owners simply because some tenants use Housing Choice Vouchers violates fair housing laws.” It said an NFHA member brought a 2013 federal complaint against Travelers in San Jose, California, and the case was settled in July 2015 after the judge denied Travelers’ motion for summary judgment and after the U.S. Supreme Court upheld disparate impact as cognizable under the Fair Housing Act. “Yet, Travelers continued to utilize this discriminatory policy in the District of Columbia,” the alliance said.

Travelers did not respond to an email request for comment.

NFHA is represented by Relman, Dane & Colfax, in Washington, D.C.

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