State Farm automated fraud detection discriminates against Black homeowners

Fraud detection software used by US insurer State Farm discriminates against Black homeowners, according to a federal class-action lawsuit. Filed in the name of Jacqueline Huskey, the suit accused State Farm of repeatedly delayed assessing hail damage to her house, forcing her to provide additional information, and declining to pay part of the claim for external damage. Huskey was not alone. Based on a survey of 800 State Farm customers, the NYU showed that Black homeowners were 39% more likely to have to submit extra paperwork a nd 20% more likely to have to talk to a State Farm representative on at least three separate occasions before having their claims approved . According to the lawsuit, the cause of the alleged discriminatory practice is State Farm's automated claims processing system, which appears to have had the effect of disproportionately delaying claims of African American homeowners. The suit notes that algorithms can have discriminatory effects even where demographic data, such as race, are not included as inputs. System 🤖 State Farm 🔗 O perator: Developer: State Farm Country: USA Sector: Banking/financial services Purpose: Process insurance claims Technology: Issue: Bias/discrimination - race Legal, regulatory 👩🏼‍⚖️ Court dockets. Huskey v. State Farm Fire & Casualty Company Legislation. US Fair Housing Act

Date it happened

2022-12-01

This is a record of what was reported, not a finding that anyone broke the law. If it names your organisation and you believe it is wrong, the corrections process is free and open to everyone.