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Incident 425: State Farm Allegedly Discriminated against Black Customers in Claim Payout

Description: State Farm's automated claims processing method was alleged in a class action lawsuit to have disproportionately against Black policyholders when paying out insurance claims.

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Alleged: State Farm developed and deployed an AI system, which harmed Black State Farm customers.

Incident Stats

Incident ID
425
Report Count
2
Incident Date
2021-06-12
Editors
Khoa Lam
Applied Taxonomies
MIT

MIT Taxonomy Classifications

Machine-Classified
Taxonomy Details

Risk Subdomain

A further 23 subdomains create an accessible and understandable classification of hazards and harms associated with AI
 

1.1. Unfair discrimination and misrepresentation

Risk Domain

The Domain Taxonomy of AI Risks classifies risks into seven AI risk domains: (1) Discrimination & toxicity, (2) Privacy & security, (3) Misinformation, (4) Malicious actors & misuse, (5) Human-computer interaction, (6) Socioeconomic & environmental harms, and (7) AI system safety, failures & limitations.
 
  1. Discrimination and Toxicity

Entity

Which, if any, entity is presented as the main cause of the risk
 

AI

Timing

The stage in the AI lifecycle at which the risk is presented as occurring
 

Post-deployment

Intent

Whether the risk is presented as occurring as an expected or unexpected outcome from pursuing a goal
 

Unintentional

Incident Reports

Reports Timeline

Incident Occurrence+1
New Suit Uses Data to Back Racial Bias Claims Against State Farm
New Suit Uses Data to Back Racial Bias Claims Against State Farm

New Suit Uses Data to Back Racial Bias Claims Against State Farm

nytimes.com

State Farm accused of making it harder for Black customers to get payouts

State Farm accused of making it harder for Black customers to get payouts

courthousenews.com

New Suit Uses Data to Back Racial Bias Claims Against State Farm
nytimes.com · 2022

Jacqueline Huskey, a Black woman living in suburban Illinois, tried more than a dozen times to get help from State Farm after a hailstorm punched holes in her roof. Now, thanks to a broad study of how the insurer handles claims like hers, s…

State Farm accused of making it harder for Black customers to get payouts
courthousenews.com · 2022

CHICAGO (CN) — Black home insurance policyholders brought a federal class action against State Farm on Wednesday morning, alleging the multibillion-dollar company subjects their claims to greater scrutiny than it does those of white clients…

Variants

A "variant" is an incident that shares the same causative factors, produces similar harms, and involves the same intelligent systems as a known AI incident. Rather than index variants as entirely separate incidents, we list variations of incidents under the first similar incident submitted to the database. Unlike other submission types to the incident database, variants are not required to have reporting in evidence external to the Incident Database. Learn more from the research paper.
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