The department said its inquiry also found that in New York State overall, the more African-Americans there were in a neighborhood, the less likely Erie was to write an insurance policy there. In addition, it found Erie was less likely to appoint agents to such neighborhoods.

HUD said its investigation began as the result of a complaint filed by the Fair Housing Council of Central New York.

Fair Housing Council of Central New York testers posed as first-time homebuyers with no insurance claims in the past five years. They called Erie insurance agents, seeking insurance for homes in either Syracuse (which is predominantly African-American) or Liverpool (which is predominantly white).

HUD said FHCCNY had closely matched the properties for several characteristics, including but not limited to purchase price, age of the property, type of construction, square footage, number of bedrooms and bathrooms, distance to the fire department, presence of burglar and smoke alarms, and age and type of the siding, roof, and heating and plumbing systems.

In four tests, the Syracuse testers did not receive quotes for homeowners insurance despite specific requests, while the Liverpool testers received quotes by telephone or mail, HUD said.

The testers in four other tests seeking insurance for homes in Syracuse received quotes for Erie's second-broadest coverage, Extracover, but did not receive quotes for Erie's best insurance product, Ultracover, according to HUD.

The testers seeking insurance in Liverpool received quotes for Ultracover, which HUD noted provides more extensive replacement cost coverage than the Extracover policy.

HUD said its investigation revealed that in the 600 New York ZIP codes in which the African-American population is less than 1 percent, Erie has 49 agents, representing 2.7 agents per 100,000-population. In the 27 New York ZIP codes in which the African-American population is greater than 30 percent, Erie has two agents, representing 0.55 agents per 100,000-population.

Erie does not market its products or appoint agents on Long Island, in New York City or in the suburban counties north of New York City.

“The numbers don't lie. Whether you examine Erie by ZIP codes or by families insured, the differences between black and white are clear,” said Kim Kendrick, HUD's Assistant Secretary for Fair Housing and Equal Opportunity.

“This really is about African Americans being denied an equal opportunity to protect the biggest investment of their lives,” added Ms. Kendrick.

Erie reacted by saying that the HUD investigation was “based on several telephone calls to independent insurance agents made more than five years ago and a claim that an insurer's distribution of agents within a state must mirror the racial composition of each community within the state.”

The five agencies licensed to sell Erie insurance products that were charged by HUD were R.K. Johnson & Associates, Salanger & Hayward Agency Inc., CNY Insurance Associates, the Vacco Agency Inc., and the Grimsley Agency Inc.

The HUD charges, which will be heard before an administrative law judge, carry a maximum civil penalty of $11,000 for each violation. The Agency is asking for damages to compensate Fair Housing Council of Central New York.

It also asks that the company be ordered to hire African-American agents and do marketing and outreach to African-American communities.

Erie Insurance Group serves eleven states and the District of Columbia and is the 22nd largest U.S. property insurer, the company said.