Washington State insurance commissioner calls for credit scoring to end
The insurance commissioner in Washington joined consumer groups and private citizens who have decried the auto insurance industry practice of using credit scores to calculate drivers’ premiums
Auto insurance companies should not be allowed to use consumers’ credit scores in their premium calculations, Washington insurance commissioner Mike Kreidler said this week.
Especially in these economic times, Kreidler suggested, it’s “blatantly unfair” for insurers to link a driver’s claim risk to his credit history. He said he had heard from consumers whose rates had shot up after they had canceled cards or opted to buy an item on a store card with deferred interest. Some people reported paying more for insurance because they didn’t have enough cards to establish a credit history.
“What do any of these choices have to do with how these people drive their cars?” Kreidler asked rhetorically.
A person’s credit score can affect his auto and home insurance rates by as much as 50 percent, he added.
His exhortations were echoed last month by Massachusetts Attorney General Martha Coakley, who called for the elimination of credit scoring in premium calculations.
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Posted: January 20, 2010
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