The shifting rhetoric of insurance denial

I. Introduction

As recent court cases and academic studies have revealed, discrimination against certain groups by the insurance industry still remains an unfortunate practice (United States v. American Family Mutual Insurance Company [1995]; "Insurer To Revise Its Urban Business," New York Times, 1 Feb. 1997; Treaster 1998). By definition, discrimination occurs when two otherwise identical individuals are treated differently by virtue of a particular characteristic. Paired testing using black and white applicants has revealed that illegal discrimination (i.e., using distinctions based on criteria banned by law) can take many forms, from agents refusing to return customer phone calls, to offering higher prices and weaker policies, to denying outright coverage for members of unwanted groups (Lynch 1997; Smith & Cloud 1997; but see Wissoker, Zimmermann & Galster 1998). Discrimination can also take the more subtle form of the insurance company being slower to handle the claims of ethnic minority claimants than of whites (Baker & McElrath 1997; Chan 1999). Insurance companies desire certain groups more than others as customers, and as a result, those who do not fit the underwriter's vision of the ideal member of society, such as certain racial and ethnic minorities, the poor, gays and lesbians, and people with alternative lifestyles, can have a difficult time obtaining desired coverage.