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HUD Archives: News Releases

HUD No. 98-577
Further Information:For Release
In the Washington, DC area: 202/708-0685Tuesday
Or contact your local HUD officeOctober 27, 1998


Housing and Urban Development Secretary Andrew Cuomo and Connie Chamberlin - Executive Director of a Richmond, VA fair housing group that won a record $100 million racial discrimination judgment against Nationwide Insurance Co. - said today that the landmark jury verdict will benefit minority homeowners and inner cities across the nation.

Chamberlin's group - Housing Opportunities Made Equal (HOME) - was one of five groups around the country sharing a $1.5 million grant from HUD to conduct testing to uncover discrimination by companies issuing homeowners insurance policies. The HUD-funded testing in Richmond sent blacks and whites into Nationwide offices and the offices of other insurance companies posing as homeowners seeking insurance.

"African Americans have long paid a terrible price for housing discrimination that denies them the right to raise their families in any home and in any neighborhood they can afford," Cuomo said. "This $100 million verdict tells companies loud and clear that it is now their turn to pay a terrible price if they continue to discriminate."

"The strong support of President Clinton and Secretary Cuomo has made this verdict possible," Chamberlin said of the verdict issued Monday. "No President and no Secretary of HUD have done more to fight all types of housing discrimination. I think this verdict is going to change the way insurance is sold in the United States. It's a wake-up call telling insurance companies that discrimination simply does not pay."

Cuomo added: "I congratulate HOME for its outstanding work on this case, and I am proud of HUD's involvement as HOME's partner in the fight for housing equality. If we are to create the One America that President Clinton seeks, we must end housing discrimination once and for all. This 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. This verdict will strengthen urban neighborhoods around the country."

Richmond Mayor Timothy Kaine, who was one of the attorneys representing HOME, said: "We have zero tolerance of housing discrimination in Richmond. This court decision is good for every resident of this city, and will help bring us together as a community."

HOME's HUD-funded testing found that Nationwide - based in Columbus, OH - offered superior homeowners insurance coverage to whites and to those who owned homes in white neighborhoods. The testing found that Nationwide often denied insurance coverage or offered less desirable or more costly coverage to African Americans and to those with comparable homes in black neighborhoods.

The Richmond Circuit Court jury accepted the conclusion of the testing and returned the $100 million judgment against Nationwide for violating the Fair Housing Act by illegally discriminating against black homeowners and predominantly black neighborhoods.

The jury also awarded HOME $500,000 in compensatory damages for the diversion of its resources and the frustration of its mission.

Under the Clinton Administration, HUD has made the fight against all types of housing discrimination, including homeowners insurance discrimination, a priority.

In July 1996, HUD helped reach an agreement to settle discrimination allegations by the National Fair Housing Alliance against State Farm insurance. State Farm agreed to significantly alter its national underwriting practices to eliminate minimum age and value requirements.

Under Cuomo, HUD followed up in February 1997 by negotiating another major discrimination settlement with Allstate Insurance Company in a complaint brought by the National Fair Housing Alliance. Allstate also agreed to make major policy changes in its underwriting standards and to add new guidelines on replacement cost insurance.

HUD began a crackdown against housing discrimination last year at President Clinton's direction. Cuomo said HUD will be able to continue moving aggressively against housing discrimination as the result of an increase in the budget of its Office of Fair Housing and Equal Opportunity from $30 million in the 1998 fiscal year to $40 million for fiscal year 1999.

The Fair Housing Act bars housing discrimination on the basis of race, color, religion, sex, disability, family status and national origin. The Act covers the sale, rental, financing and advertising of almost all housing in the nation. Fair housing investigations are conducted by HUD investigators, state and city agencies working with HUD, and private fair housing groups, such as HOME, that receive HUD funds.

People who believe they have been harmed by housing discrimination can file complaints with HUD by calling 1-800-669-9777 or by filing a complaint with HUD over the Internet.

Content Archived: January 20, 2009

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