American Property Casualty Insurance Association

Tell HUD to Exclude Homeowners’ Insurance from the Disparate Impact Rule

The U.S. Department of Housing and Urban Development (HUD) has once again put forward a proposal regarding the Disparate Impact Rule. HUD proposes to reinstate the 2013 version of the rule that was superseded by the 2020 version. As you may recall the 2020 version was set to become effective on October 26, 2020, when a Massachusetts federal district court stayed the implementation and enforcement of the 2020 rule in a related lawsuit against HUD.

Reinstating HUD’s 2013 Disparate Impact Rule would apply disparate impact liability to homeowners, property, and hazard insurance without the limitations recognized by the U.S. Supreme Court in its 2015 Inclusive Communities decision, leading to vast, unintended consequences for the insurance industry and policyholders alike. Any application of disparate impact liability to homeowners, property, and hazard insurers interferes with state-based regulation, undermines risk-based pricing, and makes the industry less able to accurately price for risk. This rule change could penalize many Americans, including with potentially higher costs.

America’s insurers are dedicated to treating all consumers fairly when it comes to home, auto, and business insurance. This rule change will not help achieve those goals and would only serve to disrupt risk-based pricing, and risk increasing insurance costs in the process.

A comment period on this proposed rule is now open. Make sure your voice is heard on this critical issue—take action now!