Language-Based Denial of Insurance Triggers Suit

Adalberto Rodriguez said he never thought that people’s language skills had anything to do with their eligibility for personal insurance.

But there it was, in a form letter from Provident Life and Accident Insurance Co., a statement as clear as it was puzzling: “The insurance coverage for which you have applied has been denied . . . in view of inability to speak and understand the English language.”

The father of three, who lives in Diamond Bar and runs a car sales business there, said the letter took him by surprise because he expected a smooth approval for his disability insurance application. After all, he had passed all the required health tests. And he had no problem purchasing life insurance for $2 million with another company, which he figured would be a good precedent.

The denial, Rodriguez has come to believe, can only be explained as a case of plain discrimination. He has filed a lawsuit against Tennessee-based Provident, alleging that the company denied him disability insurance solely because he is a Cuban national and does not speak English well. He is seeking $15 million in punitive damages.

“I scratch my head; it seems like something from another era,” said Lazaro E. Fernandez, who is representing Rodriguez. “Anyone who has seen [the letter] is simply appalled.”

Lawyers for Provident declined to comment specifically about the case. They said the company has decided, from now on, to make its insurance available to customers regardless of the language they speak. But in the past, they acknowledged, the company’s policy was to deny coverage to non-English-speakers under certain circumstances.

“In some cases we have been reluctant to market our policies to customers who are not reasonably fluent in English, in large part due to our desire to protect potential buyers,” said Greg Sachnik and Rick Brooks, attorneys for the company. They said Provident was “concerned with the risk” of having buyers who didn’t fully understand what they were getting into.

That explanation is “arrogant and elitist,” responded Fernandez, because it presupposes that someone not necessarily fluent in English may not be able to understand the contract.

Others agree that the argument does not make sense from an economic point of view.

“Why would a company hinder its abilities in the market?” asked Scott Edelen, a spokesman for the California Department of Insurance.

Yet the practice of denying insurance based on someone’s language is far from rare, said Mark Savage, managing attorney for Public Advocates Inc., a civil rights law firm in San Francisco.

“It’s unfortunately more common than one would like to hear,” he said.

Savage worked in the early 1990s to enforce regulations on California providers of auto and homeowners insurance, requiring them to show whether they were failing to serve certain communities. He said numerous people told of being denied coverage--either verbally or in letters--because of their difficulties with English.

Technically, Provident is not violating the California Insurance Code by denying insurance based on someone’s language, said Edelen. That’s because the statute that relates to life and disability insurance says no person should be denied coverage because of nationality, race, gender, religion, ancestry or sexual orientation, among other conditions. Language is not included in the statute.

But many in the business already consider language an implicit component of the statute because it is an integral part of a person’s national origin, Savage and Edelen said.

A company like Provident is therefore using language as a loophole to discriminate against someone for ethnic reasons, Fernandez alleges. And that’s why he and his client are going for a big sum.

“The conduct is despicable to the extent that the [$15 million demand] is meant to punish and make an example,” he said. “This is not something where [they] can say, ‘Gee, I’m sorry, here’s a few bucks.’ ”

The lawsuit, filed last week in U.S. District Court, also seeks an injunction requiring Provident to discontinue the company’s practice in California. It asks for a declaration by the court that no disability or life insurance provider in the state may discriminate against people because of language.

“It’s important for people to understand that broken English is not a sign of a broken mind,” Fernandez said.