Posted On: January 3, 2007, 10:26 am CST

Posted By: Ray Balaamababa

Some folks take this banter a little too seriously; I'm not out to insult anyone, but I don't see the need to insult me; I have a pretty good understanding of the importance of credit scores.

I'm not advocating them to be disallowed.

But I do have concern that we are using credit, which is a non driving factor, as the 'big factor' when setting rates. Sorry, I realize carriers can lump most of their customers by that factor, but we're talking about a regulated business. When a business is regulated, it has duties beyond simply making profit. If a person has a dui, traffic tickets, prior losses, or buys a vehicle with a high rate of incident, then those are statistical DRIVING factors.

Credit is not a driving factor. Perhaps we'll find out that folks who eat at buffet's are 30% more likely to have losses than those who are vegetarian; the argument can be make that should be allowed as a rating factor it there was a reliable way to measure it. It could work, however, that is not a driving factor, it is a diet factor that is correlating to driving losses. That is the simple reason I believe there should be an review/appeal process when insurance is denied, or rates increased, simply due to credit factors.

I'm not rooting for the court to overturn credit scoring, it benefits the insurance industry, which in turn benefits me. But the fact that we're using something that is not driving related leaves me to believe the court will not leave the practice untouched. Maybe I'm wrong, but we'll have to see how the folks in the robes rule.