Erie Insurance Faces Accusations of Racial Bias in Underwriting Practices

When regulators in Maryland said this spring that the small company Erie Insurance had illegally avoided selling policies to people in mostly Black neighborhoods, Erie had a ready answer: It said it was being singled out for simply doing business as usual.

The insurer, which is based in Pennsylvania and is known for selling cheap auto and homeowner policies, then took an unusual step. It sued the Maryland Insurance Administration, arguing that the regulator was unfairly attacking its ‘frontline underwriting’ practices — an approach in the insurance business requiring agents to consider subjective factors when choosing customers.