Erie Insurance Co. will pay $365,000 to settle a federal discrimination suit, alleging that the insurer ignored black residents in New York.

The Erie, Pa.-based insurer will pay $225,000 to the Fair Housing Council of Central New York for damages and attorneys’ fees. It was the council that initiated the government’s suit alleging violations of the Fair Housing Act. The insurer will also pay $140,000 to expand marketing, advertising and outreach programs to better meet the needs of targeted areas of the state with high minority populations.

Mark Dombrowski, Erie’s manager of government affair, told IFAwebnews.com that the consent decree with the federal government acknowledged that there were no “factual findings” regarding the allegations. The insurer, he said, decided on the settlement “to avoid costly and protracted litigation.

“There is also no finding or admission that either Erie Insurance or our agents violated the Fair Housing Act or otherwise engaged in any unlawful discrimination,” Dombrowski said.

In its case, the federal government alleged that between 1999 and June 2004, as the percentage of the black population increased in areas of New York, including upstate, there were fewer agents selling homeowner’s and renter’s insurance and the share of the company’s policies also decreased.

The agreement, which is in effect for three-and-a-half years, also stipulates that Erie employ a full-time director of diversity and community outreach to oversee efforts to increase the sale of these policies in targeted neighborhoods and also provide training to all of its New York employees on avoiding discriminatory practices.

As part of the $140,000 marketing effort, Erie must include print and radio advertising in mediums targeted to African-Americans and have promotional materials targeted to specific neighborhoods.

Erie provides insurance products to 11 states, including the District of Columbia, Maryland, New York, Pennsylvania, and Virginia.