What does credit scoring have to do with insurance?
Your credit score is a major factor in the cost of your insurance. The lower your score, the more you pay. Fair? We say no. Your credit score is impacted by things outside your control – such as losing your job, or being impacted by a disaster. Why should you be punished for things beyond your control? Kicked when you’re down? The poorer you are – the more you pay for your insurance? Doesn’t make sense. Unfair. Illegal…or should be. InCREDITABLE…
Consumers, insurance agents, United Policyholders, Consumers Union, the Center for Economic Justice all oppose the unfettered use of people’s credit scores to set insurance rates. We are constantly working toward bans and limitations in every state. But to date, we’ve had few successes. Insurers and their lobbyists insist that credit scores predict risk, and have blocked efforts to limit their use in insurance rating. In spite of well-reasoned public opposition, Alaska’s governor recently signed a bill allowing insurers to use credit scores when selecting customers and calculating premiums. Local headlines read: “Legislature passes insurance bill amid warnings of higher costs for the elderly, poor”…
A concerned agent wrote to UP in 2016:
“I work in an insurance office and I want to thank you so much for providing this information to people. Insurance does a lot to help people, it really does, but there are still many problems with how most companies compute rates. The biggest complaint I have about the rates is using credit information, which generally only negatively affects people who need insurance the most. Thank you so much for putting this information out there for the public. I hope more states really push for laws removing the use of credit and price optimization in setting insurance rates”.