Posted On: August 25, 2008, 1:17 pm CDT

Posted By: Analyst

Lower rates for some? Michigan Statute currently says that you can not surcharge a policy based on credit. So the companies that are using credit based insurance scores are providing discounts only. That being said, the worst case senerio is there are a handful of policyholders across the state that are not receiving any discount. What this means for the rest of us is that we will all be seing our rates go up (I personally know mine will go up over 30%) So how does that "lower premiums for many" if 90% of the population will see rates go up while the 10% not receiving any discount will not be affected at all.

Another point I would like to make is that banks have been basing how much we will pay for a loan for years using credit scores. When the bank loans money they take the risk that they may not get their investment back. "Statistics" show that if someone has been late making payments they are more likely not to repay their loan. Insurers are taking the same type of risk and the same "statistics" used in the banking industry have proven to be accurate for insurance loss. The banks have been doing the exact same thing for decades.