Subsidiaries of the nation’s second-largest writer of commercial property casualty insurance and third-largest writer of United States personal insurance face legal claims of discrimination in the District for failing to provide home insurance to apartment owners who rent to participants in the Housing Choice Voucher (HCV) program, commonly called Section 8.
The National Fair Housing Alliance (NFHA) filed a lawsuit against Travelers Indemnity Corporation and Travelers Casualty Insurance Company of America of the publicly traded Travelers Companies, Inc. alleging race, sex and source-of-income discrimination.
NFHA alleges that Travelers’ policy has an adverse impact on African-American families, especially in neighborhoods east of the Anacostia River, saying it violates the federal Fair Housing Act and the District of Columbia Human Rights Act.
“Everyone knows how hard it is to find safe and decent affordable housing in D.C.,” said NFHA President and CEO Shanna L. Smith. “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 HCV program is funded by Congress to increase choice in neighborhoods across the District of Columbia and the nation,” Smith said. “Travelers has effectively reduced the opportunity for families to exercise neighborhood choice.”
In D.C., 92 percent of the HCV-participating households in the District are African-American and 81 percent are female-headed households. Many of those households are concentrated in four census tracts east of the Anacostia River, which are 84.7 percent black, compared to 51.1 percent in the city overall.
Travelers, which operates in every state, the United Kingdom, Ireland, Singapore, China, Canada, and Brazil through more than 20,000 independent agents and brokers, is the only property casualty company in the Dow Jones and ranks 99 on the Fortune 500 list of the largest companies with $27 billion in revenue and $100 billion in total assets.
In August, the U.S. District Court for the District of Columbia issued an opinion rejecting Travelers’ motion to dismiss.
NFHA said Travelers has known since at least 2013 that denying insurance to apartment owners based off of tenant source of income violates fair housing laws, but continued to use the policy in D.C.
In 2013, NFHA member Project Sentinel and apartment owners sued Travelers for suing the practice in San Jose, California, which resulted in a confidential settlement agreement in 2015.
Following the case, NFHA launched an investigation in the District in which five independent insurance agencies representing Travelers told investigators seeking coverage for multi-family apartment buildings in Southeast that Travelers does not provide home insurance to apartment owners who rent to tenants using Section 8.
“While we generally do not comment on pending litigation, we note that Travelers provides fair access to all of its insurance products,” said Matt Bordonaro, head of media relations for Travelers. “The level or source of income of a building’s tenants does not factor into our underwriting decisions for commercial building owners.”
In its motion to dismiss, Travelers stated in an affidavit that it had not used the policy since Jan. 1, 2016. But the NFHA investigation revealed the policy was in effect in D.C. as late as February 2016.
The D.C. Department of Insurance, Securities and Banking (DISB) said home insurance is important because it “provides protection and promises a certain peace of mind” as it helps recoup and repairs loses or damages resulting from a covered peril involving a home.
DISB said they are not aware of any challenges District homeowners face obtaining home insurance, but encourage any having difficulty getting insurance to contact them to review the situation for compliance with the city’s fair access to insurance requirements by calling (202) 727-8000 or emailing firstname.lastname@example.org.