NAACP says GEICO refuses to insure blacks blacks in poor areas of Baltimore, D.C.

November 24, 1993|By Nelson Schwartz | Nelson Schwartz,Contributing Writer

WASHINGTON -- The Montgomery County chapter of the NAACP charged yesterday that GEICO, the Chevy Chase-based insurance giant, systematically refuses to insure many Baltimore and Washington neighborhoods because they are predominantly poor and black.

W. Gregory Wims, the Montgomery chapter president, said the company has tried to avoid writing auto and homeowner's insurance policies for inner-city residents in Baltimore and Washington, a discriminatory practice known as "redlining."

"Employees are trained not to write policies," said Mr. Wims. "Our research shows that hundreds of Baltimore residents have been denied insurance."

"Their mentality is that they just don't want business in Baltimore," said Charles Beckwith, a former GEICO underwriter who appeared at the news conference. After two years with the company, Mr. Beckwith was fired last week -- allegedly for complaining of biased underwriting and personnel policies there.

Officials at the Government Employees Insurance Co. (GEICO), the third-largest auto insurer in Maryland and fifth-largest in the nation, rejected the charges as completely false.

"They can say that, but if you look at the numbers, it's just not true," said August Alegi, a GEICO group vice president.

"We insure a larger percentage of people in Baltimore than we do in other areas of the state."

Mr. Alegi said that roughly 20 percent of GEICO's Maryland auto insurance policies are in the city of Baltimore, which contains about 15 percent of the state's population. "We don't redline, and there is no evidence that we do," he said.

Mr. Alegi explained that rates do tend to be higher in Baltimore city and county than in other parts of Maryland because people there "often go to lawyers more, and file more expensive claims."

Jean Bienemann, associate commissioner for property casualty insurance for the Maryland Insurance Administration, said no charges against GEICO had been filed with the agency. "We don't have any evidence that they redlined," she said.

Robert Willis, insurance commissioner for the District of Columbia, said his office would investigate GEICO's activities in Washington to see if the claims of racial discrimination were accurate.

Rep. Albert R. Wynn, a Democrat from Prince George's County, said he has written to GEICO's president, outlining the charges and asking for a response.

At the news conference, some African-Americans currently and formerly employed by GEICO maintained that the company discriminated against them and has been insensitive to the needs of black employees. Mr. Wims said the company fails to adequately promote African-Americans in what he termed a "sticky-floor syndrome."

"They may hire [blacks], but they're stuck on the floor," said Mr. Wims, who heads a National Association for the Advancement of Colored People task force on employment discrimination. The NAACP's Montgomery chapter is planning to march on GEICO's Chevy Chase headquarters Saturday morning to protest the alleged discrimination there.

GEICO employs about 2,700 workers at its headquarters, 30 percent of whom are black, he said. Mr. Alegi said that 20 percent of GEICO's managers and officers are black and added that two of the company's 11 directors are African-American. "We have an outstanding record," he said.

Baltimore City Council President Mary Pat Clarke filed a complaint with the Maryland Human Relations Commission maintaining that GEICO illegally charged exorbitant rates in certain areas of the city.

In a separate case, the East Baltimore chapter of the Association of Community Organizations for Reform Now (ACORN) accused the Allstate insurance company of discriminating against selected Baltimore neighborhoods in writing homeowner's policies.

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