Customers and Employees Accuse State Farm of Racial Discrimination When Denying Claims

Many people are familiar with insurance companies denying claims for a variety of reasons. Every dollar they use to repair or replace property is a dollar they can’t categorize as a profit or distribute to their executives as a bonus, so it’s common for insurance companies to try to find ways out of paying for claims. What is less common is to hear a claims adjuster say they don’t believe your story because your area is supposedly rife with fraud. That’s exactly what Darryl Williams, a former property owner on the South Side of Chicago, heard when he filed a claim for damage done to one of his apartment buildings when a pipe burst.

Williams is Black and the South Side of Chicago is a predominantly Black neighborhood, so since State Farm had no evidence of fraud, Williams felt he was being discriminated against as a Black man. He sued State Farm in Illinois for racial discrimination in 2019 and his attorney asked for the lawsuit to be tried as a class-action lawsuit, but the judge denied the request, saying the attorney’s analysis was not sufficient evidence that others had had experiences like Williams’s. Then Carla Campbell-Jackson, a former employee of State Farm, reached out to back up Williams’s allegations.

Campbell-Jackson had worked for State Farm for almost 30 years and loved her job until she was promoted to the special investigations unit (SIU), where claims adjusters sent potentially fraudulent claims to be more closely reviewed. Shortly after her promotion, Campbell-Jackson realized State Farm executives wanted SIU employees to meet with claims adjusters to encourage them to send more claims to be investigated by the SIU. The goal, according to Campbell-Jackson, was to deny as many claims as possible. She alleges investigators were told at weekly meetings to focus on claims from urban areas that were supposedly at a high risk for fraud, which would allegedly make those claims easier to deny. Campbell-Jackson alleges they would even circulate lists of supposedly “high-risk” areas. In her testimony, she said it was a way to deny millions of dollars in payments to African Americans and other minorities.

Campbell-Jackson further alleges Black policyholders calling to complain about the fact that their claims were denied were sent directly to her from her managers. She alleges this was so State Farm could say a Black woman had reviewed the cases and found they were correct to deny the claims.

The only problem was that Campbell-Jackson did not agree with State Farm’s policy of denying many of these claims, and after she tried to alert State Farm executives to the fact that she thought claims were being wrongfully denied, she was fired.

Robert McLaughlin, an attorney who is representing Campbell-Jackson in her lawsuit against State Farm, says she is just one of more than 150 current and former employees of color he is representing who are planning to bring their own allegations of racial discrimination against the insurance provider.

Already there are other lawsuits against State Farm, including one filed in 2020 by seven insurance agents who allege the company engages in a pattern of racial discrimination. A third lawsuit was filed in February 2022 by an Indian American former employee of State Farm who alleged they suffered racial harassment from their co-workers.

Meanwhile, Kenneth Anspach, who is representing Williams in his case against State Farm, alleges his client is far from the only policyholder to have faced racial discrimination when trying to file a claim with the insurance company.

For its part, State Farm denies all the allegations of racial discrimination and insists it will defend itself in court.

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