State Farm says racial discrimination lawsuit does not reflect its values

The lawsuit alleges that State Farm’s fraud detection methods discriminate against Black consumers.

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BLOOMINGTON, IL: State Farm has responded to a lawsuit alleging the insurer discriminates against Black customers. 

“We take this filing seriously. This suit does not reflect the values we hold at State Farm. State Farm is committed to a diverse and inclusive environment, where all customers and associates are treated with fairness, respect, and dignity. We are dedicated to paying what we owe, promptly and courteously,” State Farm public affairs specialist Gina Morss-Fischer said via email. 

The case stems from a study from New York University’s School of Law and law firm Fairmark Partners, according to The New York Times, which first reported the news.

Led by plaintiff Jacqueline Huskey, the lawsuit alleges that State Farm’s fraud detection methods discriminate against Black consumers when handling those claims. The case, which was filed in Illinois federal court this week, includes hundreds of currently unnamed plaintiffs, representing State Farm’s Black customers in six Midwestern states. 

The aforementioned plaintiffs struggled more, compared to white customers, to get homeowners’ insurance claims paid out, according to the lawsuit, which is seeking class-action status. 

According to the Times, State Farm has a division it uses to investigate potential fraud. A whistleblower has claimed that managers within the unit have specifically highlighted Black neighborhoods as areas with high fraud incidents. 

State Farm partners Duck Creek Technologies and artificial intelligence company Friss are both also mentioned in the case. Duck Creek helps State Farm process its claims, which the former then enlists Friss’ support on, helping to flag claims for potential fraud. 

Duck Creek and Friss representatives could not be immediately reached for further comment. 

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