One of the three brokers said Erie Insurance told him to stop underwriting policies for people with “city”-sounding names.
Three Maryland-based insurance brokers have filed complaints accusing Erie Insurance of “redlining” practices in predominately Black neighborhoods in Baltimore.
The companies rallying against Erie include the Baltimore Insurance Network, LLC, the Ross Insurance Agency and Welsch Insurance Group. Two of the three businesses are Black-owned, and maintain that Erie is specifically discriminating against minority communities.
Each of the businesses, says The Associated Press, filed separate complaints against Erie with the Maryland Insurance Administration.
According to The Baltimore Sun, every one of the three complainant companies has or had sales contracts with Erie Insurance. Their contracts permitted the brokerages to offer Erie’s coverage policies and services to qualified consumers.
However, the brokers allege that Erie, in many cases, refused to sell certain services to the residents of impoverished, predominately Black neighborhoods in and around Baltimore.
Erie’s coverage refusals were seemingly made without reference to individual consumers’ circumstances, needs, and qualifications.
“Erie Insurance brokerages that service Baltimore, and in particular that serve the poor areas of Baltimore which are predominately African-American, are being told that even when customers meet their underwriting standards and when they would otherwise qualify, Erie is not interested in certain customers,” said Cary J. Hansel, an attorney with Baltimore Insurance.
Baltimore Insurance and Welsch, state The Baltimore Sun, were able to cite specific instances wherein Erie representatives made overtly discriminatory remarks.
Baltimore Insurance, for instance, recounted a conversation one of its officials had with an Erie branch manager. The manager purportedly complained of the broker’s willingness to sign on certain clients, and instructed Baltimore Insurance to “place those people elsewhere; I don’t care where, just not with Erie. They don’t fit Erie’s appetite. Find better people.”
Baltimore Insurance also says it was instructed to reduce its sales goals by up to 30% by rejecting qualified applicants from particular neighborhoods.
In their complaint filed with the Maryland Insurance Administration, Baltimore Insurance notes their contract with Erie only stipulated that applicants from low-income neighborhoods be subjected to criminal background checks.
Similar to the experience of Baltimore Insurance’s management, Thomas A. Welsch of the Welsch Group says Erie officers told him to find better business from “somewhere else.”
The Baltimore Sun provides other examples of subtly and overtly prejudice: one Erie manager allegedly instructed brokers not to underwrite policies for people with “city”-sounding names, while another set entire ZIP codes off limits for business.
Matthew M. Cummings, an Erie Insurance Group spokesperson, said the firm has yet to be notified of any litigation or pending complaint.
However, Cummings did tell the Sun that his company’s underwriting protocol complies with Maryland state law.
“Erie Insurance’s underwriting practices comply with all Maryland state insurance law and regulations,” Cummings said in a statement emailed to the Sun. “We are committed to the equitable treatment of all prospective and existing customers and maintaining fair and equitable business standards.”