Technology and Racial Bias: Study Backs Lawsuit Against Insurer

Jacqueline Huskey, a Black woman living in suburban Illinois, tried more than a dozen times to get help from State Farm after a hailstorm punched holes in her roof. Now, thanks to a broad study of how the insurer handles claims like hers, she has evidence indicating that her struggle is a common one for Black customers.

Ms. Huskey is suing State Farm, and the study is the basis of the lawsuit. It is the first of its kind to use company-specific data to highlight racial bias, which is difficult to prove.

The suit, which is seeking class-action status, also focuses on how State Farm’s fraud detection methods discriminate against Black customers when paying out those claims.

Filed in Illinois federal court on Wednesday, it includes Ms. Huskey and hundreds of other as yet unnamed plaintiffs, and represents the insurer’s Black customers in six Midwestern states.

All the plaintiffs had a harder time getting homeowners’ insurance claims paid out compared with white customers, according to the lawsuit, which may seek hundreds of millions of dollars in damages.