Recent Development in Ongoing State Farm Litigation
In the class action lawsuit Huskey et al. v. State Farm Fire & Casualty Co. (filed in 2022 in the U.S. District Court for the Northern District of Illinois), plaintiffs allege that State Farm’s use of algorithmic decision-making tools and machine-learning algorithms in processing homeowners’ insurance claims results in racial discrimination against Black policyholders. These tools reportedly flag Black claimants’ submissions for greater scrutiny, leading to delays, additional paperwork requirements, and lower payouts compared to white policyholders, in violation of the Fair Housing Act.
A key piece of evidence cited by plaintiffs is a 2021 survey conducted by YouGov (in collaboration with NYU’s Center on Race, Inequality, and the Law), involving 648 white and 151 Black State Farm policyholders across several Midwestern states. The survey found significant disparities, such as:
- White homeowners being nearly one-third more likely to have claims processed in under a month.
- Black homeowners being 39% more likely to require extra documentation, causing prolonged delays.
The court denied State Farm’s motion to dismiss in 2023, finding the allegations plausible and noting that distinguishing between human and algorithmic decision-makers could undermine anti-discrimination laws in the AI era. The case has proceeded, with ongoing discovery disputes common in such litigation.
While no public reports confirm a specific recent ruling (as of December 2025) explicitly granting State Farm access to the raw survey data to challenge the plaintiffs’ reliance on algorithmic tools, discovery phases in civil rights cases involving AI bias often involve defendants seeking underlying data to contest statistical claims or methodology. This lawsuit is considered a bellwether for AI-related discrimination challenges in insurance and other sectors.
State Farm has denied the allegations, emphasizing compliance with laws and fair claims handling. The case remains active, with potential implications for auditing and transparency in algorithmic systems used by insurers.