While Black Americans have said for years that the country's largest home insurance provider, State Farm, discriminates against customers of color, a lack of public data has made it difficult to prove those claims- until now. According to a class action suit filed in Illinois federal court, a nine-month study has revealed that Black homeowners regularly had to go through a significantly more difficult process to get coverage relative to white customers.

"We take this filing seriously," State Farm spokesperson Gina Morss-Fischer said. "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."

Conducted in 2021, the study showed that Black customers at State Farms had to file more paperwork and interact more with adjusters in order to get compensation. The study was initiated after The New York Times reported on claims from many Black homeowners about their difficulties accessing homeowners insurance coverage.

As The Times laid out in that piece, insurance companies are incredibly secretive with their data, arguing that revealing how much they payout would hurt their ability to compete. As the trade group Insurance Information Institute put it, insurance payouts are considered "losses" by the insurers, meaning revealing those payouts would put the companies "at a competitive disadvantage to each other."

Following the Times report, lawyers with the Center on Race, Inequality and the Law at the New York University School of Law began conducting a survey of more than 800 State Farm customers.

While white homeowners were usually able to get coverage in fewer than three interactions with the company, Black customers were 20% more likely to have to speak to an adjuster at least three times before receiving approval. Black filers were also much more likely to be given extra paperwork to complete.

"Those administrative burdens are real and deeply impactful in peoples' lives," said Deborah Archer, director of the NYU Center on Race, Inequality mentioned above.

Human bias may not be the only, or even the most significant, issue at play: like many insurance companies, State Farm uses artificial intelligence software to help it process claims, but the software it relies on gives each policyholder a "risk score" based on "demographic data about the neighborhood, such as the degree of urbanization" and data from social media.

"The term 'urbanization' is in the dictionary of dog whistles," Archer said.

If the class of complainants is certified, there could be as many as 10,000 people involved in the suit against State Farm.