The National Fair Housing Alliance (NFHA) has filed a federal lawsuit Tuesday against Travelers Indemnity Company and Travelers Casualty Insurance Company of America, accusing the insurers of engaging in actions that violated local and federal housing laws.
Travelers has allegedly failed to provide habitational insurance to apartment owners in Washington, D.C., who rent to tenants participating in the Housing Choice Voucher (HCV) program, according to the lawsuit filed in the U.S. District Court of the District of Columbia.
In response, Travelers provided the following statement to Insurance Journal: “We typically don’t comment about ongoing litigation. But it should be noted that we provide fair access to our insurance products. The level or source of income of a building’s tenants does not factor into our underwriting decisions for commercial building owners.”
NFHA said denying insurance coverage because tenants subsidize their rental payments with public vouchers is a violation of the federal Fair Housing Act as well as the local District of Columbia Human Rights Act because it has a disproportionate adverse impact on African Americans and female-headed households in Washington, D.C.
NFHA said Travelers’ alleged business practices were discovered by NFHA’s investigators, who contacted five independent insurance agencies that sell Travelers policies in the D.C. area.
NFHA investigators sought insurance coverage for multi-family apartment buildings located in Southeast Washington, D.C.
According to court documents, when investigators mentioned that their tenants participate in the public voucher program — often referred to as “Section 8” — every investigator was told that Travelers does not provide habitational insurance to apartment owners who rent to tenants using Section 8. NFHA said investigators were told to seek coverage from other insurers.
NFHA said when investigators mentioned the presence of tenants participating in the public voucher program, agencies’ comments included:
- “Wait a minute. Stop right there. Subsidized housing is a problem.”
- “Travelers” [sic] won’t write subsidized housing policies.”
- “…any Section 8 would be a problem” and “Travelers doesn’t want any part of it.”
- “…if all four have subsidized housing, doubting they’ll want to do it, quite honestly.”
NFHA alleged that evidence gathered over a 10-month period in 2015-2016 documented this ongoing pattern and practice.
The lawsuit said Travelers’ alleged practices and underwriting guidelines have a discriminatory impact on the District’s most vulnerable households. Such practices disproportionately harm African Americans and women and deter apartment owners who want to help house low-income families in D.C., the suit alleged.
NFHA said African American households make up 92 percent of Housing Choice Voucher participants in D.C., although they are just 45.2 percent of all households in the District. Female-headed households make up 82 percent of Housing Choice Voucher participants in D.C., but only 47 percent of all households in the District.
NFHA said its mission is to combat housing discrimination and promote residential integration is frustrated when an insurer imposes additional, discriminatory impediments that make it more difficult and more expensive for landlords to accept Housing Choice Vouchers.
“Travelers’ refusal to write property and casualty insurance for landlords with tenants participating in the Housing Choice Voucher program is the equivalent of, and has the same effect as, a refusal to write insurance for landlords because they rent to a higher proportion of households that are African-American/Black or female-headed households,” NFHA said in the lawsuit.
NFHA also argued Travelers’ alleged underwriting criteria disproportionately harm neighborhoods in D.C. where African-American/Black households are statistically more likely to live.
In the lawsuit, NFHA requests that the court prohibit Travelers from refusing to insure, or canceling the insurance of, or charging higher rates to, landlords on the basis that they rent to tenants who participate in the Housing Choice Voucher program.
The lawsuit seeks to require Travelers to develop and implement practices and procedures that do not discriminate against persons protected by D.C. and federal fair housing laws. The suit also requests awarding all available damages, including compensatory damages as well as punitive damages.
The case is National Fair Housing Alliance v. Travelers Indemnity Company and Travelers Casualty Insurance Company of America, U.S. District Court of the District of Columbia, Case No. 16-cv-928.
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