State Farm hit with lawsuit as policyholders claim AI-driven discrimination

The complaint goes further, accusing State Farm of exploiting elderly, blind, and partially blind policyholders by selling them unneeded, unnecessary, overpriced, or unsuitable insurance products. The Kellys allege that State Farm used false data from credit reporting agencies to deny, refuse, or cancel insurance contracts, and that these practices disproportionately harmed Black and non-white policyholders. According to the complaint, State Farm’s claims-processing methods relied on “cheat and defeat AI algorithms as discriminatory tools,” which the plaintiffs say subjected their claims to greater scrutiny than those of white policyholders.