Insurer agrees to rate changes, damages to settle case

Tennessee Fair Housing Council
719 Thompson Lane, Suite 200
Nashville, Tenn., 37204
615-383-6155
Fax: 615-383-8389 Oct. 11, 1999

(NASHVILLE) The Tennessee Fair Housing Council ("TFHC") and Metropolitan Property and Casualty have reached a settlement in a complaint of race discrimination in the provision of homeowners insurance in Nashville. The TFHC filed the complaint with the U.S. Department of Housing and Urban Development in late 1995.

Under the settlement, Metropolitan has already adjusted its homeowners insurance premium rates in the central part of Nashville to bring them more into line with the surrounding areas. The insurer also will pay the TFHC $75,000 as compensation for its attorney's fees and expenses in connection with the case and will offer a 10% discount to prospective customers who complete a home maintenance training program, which the TFHC hopes to establish in cooperation with a local housing counseling agency.

TFHC filed the complaint with HUD after HUD-funded testing of two of the company's agents showed that homeowner's insurance rates were up to 48% higher for zip codes within the central part of Nashville than they were for surrounding areas. The TFHC alleged that Metropolitan's rate structure constituted illegal race discrimination because it had a disproportionate impact on the affected zip codes, which contained 82% of Davidson County's African American families. Every majority black zip code in Davidson County is in this disadvantaged rating territory.

At the time of TFHC's testing of the company, the agent with whom TFHC's African American tester dealt told the tester that Metropolitan would not be competitive in his north Nashville zip code, 37218. He was also quoted a premium of $800 per year, while the white tester was quoted an annual premium of $490 a year for a similar house in Bellevue.

As part of the settlement, Metropolitan will also:

  • implement a "repair letter" program in which applicants and current policy holders are provided with detailed information concerning repairs they need to make before denying or canceling coverage; continue to increase its advertising and outreach to a broad demographic spectrum in Nashville; and
  • talk to TFHC before changing premium rates in the Nashville metropolitan area.

The parties reached the settlement in order to avoid the time, expense and uncertainty of continued litigation. HUD did not complete its investigation of the case or make any finding for or against Metropolitan's liability in the case, and the company and its agents admitted no wrongdoing.

The Tennessee Fair Housing Council is a private, non-profit organization whose mission is the eradication of housing discrimination in middle Tennessee. The TFHC, whose services are free of charge, takes complaints of housing discrimination and investigates them and helps victims to pursue their rights under federal and state fair housing laws. The TFHC also provides education about such laws, which prohibit discrimination in housing on the basis of race, color, national origin, sex, religion, disability or familial status (the presence or anticipated presence of children under 18 in a household). The law covers rental, sales of homes and vacant land for residential purposes, mortgage lending, homeowners insurance, housing advertising and other housing-related activities. Those who believe they may have experienced housing discrimination should contact the TFHC at (615) 383-6155.

Those with Internet access are also encouraged to visit the National Fair Housing Advocate Online, a national web site about fair housing, which the TFHC has operated partly with HUD support since 1995. The address is http://www.fairhousing.com.

Since 1995, the TFHC has participated in the Private Enforcement Initiative of HUD's Fair Housing Initiatives Program, a competitive grant program whereby HUD provides money to nonprofit fair housing organizations to carry out testing and enforcement activities to prevent or eliminate discriminatory housing practices. HUD personnel conducted most of the conciliation negotiations that led to the agreement.

Kevin Kijewski, staff attorney for the Kentucky Fair Housing Council, represented the TFHC in the case. Former TFHC assistant director and current board member Joel Emerson and former staff members Molly Hadley Jensen and Trevor Crowder conducted the investigation that led to the complaint. Kentucky Fair Housing Council Executive Director Galen Martin was also the executive director of the Tennessee Fair Housing Council at the time of the investigation.