HOME-Richmond wins $100.5 million jury award against Nationwide Insurance

In what the U.S. Department of Housing and Urban Development (HUD) has called the largest fair housing jury award ever, Housing Opportunities Made Equal (HOME) and three individual plaintiffs will receive $100 million in punitive damages and $500,000 in compensatory damages from Nationwide Insurance Companies and eight Richmond, Virginia area agents.  A Virginia jury found that the company and its agents had engaged in a pattern and practice of racial discrimination in the sale of homeowners insurance.  The complaint was filed under the Virginia Fair Housing Act and was tried in the Circuit Court of Richmond.

The lawsuit stemmed from a series of 15 paired tests that HOME conducted in 1995 and 1996.  Using homes with similar market values, African-American and white testers contacted Nationwide agents to attempt to get quotes for homeowners policies.  The African-American testers called about houses in predominantly minority neighborhoods, and white testers called about houses in predominantly white neighborhoods.

In 12 of the 15 tests, according to HOME, the African-American testers received poor treatment when compared to white testers.  In seven of the tests, agents gave quotes to white callers but refused to give quotes to African-American callers.  In five of the tests, agents quoted higher rates to African-American testers than to white testers, even though the homes they inquired about were of comparable age and value.

According to Constance Chamberlin, HOME's executive director, the paired testing was "the tip of the icerberg."  HOME's investigation into Nationwide's practices following the tests uncovered a "fairly stunning pattern of institutional racism," said Chamberlin.

HOME asserted that Nationwide charged higher rates within the inner city of Richmond which is majority African-American than in the predominantly white suburbs.  HOME also said Nationwide's "penetration rate" -- defined as the number of policies sold per 1,000 households -- is twice as high in white neighborhoods when compared to black neighborhoods.

A Nationwide spokesperson denied wrongdoing.

At the settlement announcement, HUD Secretary Andrew Cuomo said, "Today's verdict is good news not just for minorities, but for inner city neighborhoods that have suffered far too long from redlining and other forms of discrimination."