deafening silence

There's a statement from an insurance industry representative in the article.

It sounds to me that insurance companies have learned that some customers tend to receive more benefits in claims payouts than others. In order to make money on a policy, the companies try to limit the number of the more expensive insured parties they are willing to cover.

Is it plausible that buildings with more subsidized housing will have more costly claims? I imagine these buildings are more likely to be located in neighborhoods with relatively higher crime, and perhaps slower emergency response. Tenants receiving subsidies might be less likely to change batteries in smoke detectors or purchase more reliable appliances. Managers of buildings with more subsidized housing might be less responsible about safety maintenance.

On the other hand, wealthier tenants might have higher claims as well, because they own more valuable property. If the insurance company could "discriminate" to identify buildings that have more tenants with expensive stereos, or valuable artwork, they could charge higher premiums or decline to offer insurance to them as well. I expect they use location as a proxy for these factors.

Student housing is included in the 25% limit. The article suggests this is because it is "transient" like a bed and breakfast. That doesn't make much sense, a student is likely to stay six months to a year like many other rental tenants. I suspect that student housing is likely to lead to more claims.

Gary Becker argued that discrimination is costly to firms. If a firm seeks solely to maximize profits, it can't afford to indulge in discrimination against factors that do not affect the bottom line. A firm that passes on profitable opportunities in order to indulge a prejudice will be less competitive.