Judge Approves Settlement in Insurance Discrimination Case

By: Associated Press
By: Associated Press

Minority customers who paid higher premiums under an old Allstate formula can seek 50 to 150 dollar refunds under a a class-action settlement.

This after a federal judge approved settlement in a case accusing Allstate of discriminating against minority policyholders.

The San Antonio lawsuit challenged Allstate's use of credit scoring to determine rates set for policyholders. It argued that the formula acted as a kind of redlining for minorities and forced Hispanic and black customers to pay more.

Allstate has agreed to change its formula to include strictly financial factors like the number of late bill payments or how often items were purchased on installment plans.

Jose DeHoyos, of San Antonio man, served as the lead plaintiff in the class-action lawsuit filed in 2001. DeHoyos had his premium jump 31 percent in a year even though he and his wife had made only one claim during 20 years as Allstate customers.

Allstate continues to deny that it discriminated against customers or that the credit data was invalid.

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