Washington Bill to Ban Insurers from Using Credit Scores Heads to Senate

January 12, 2021

  • January 13, 2021 at 10:44 am
    Observor says:
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    This bill would cause responsible people who pay their bills on time to see very significant increases to their premium. Why penalize this group?

    Insurance credit scoring does not penalize those with large medical bills.

    There is a strong correlation between losses and credit scoring most likely due to the fact that people who are conscientious about paying their bills are also careful drivers and maintain their property,

    • January 13, 2021 at 12:52 pm
      SWFL Agent says:
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      I would also argue as well that the insured has some control over their credit score and can work to improve it and thus improve their insurance rate over time. Unlike gender or age. I believe the real proof of the validity of credit scoring is that most major insurance carriers use it. If it was meaningless, it seems like a major carrier could really attract new business by advertising “our rates are great and we don’t care about your credit score”. But I don’t believe companies are lining up to do this. You can’t argue the fact that credit score is a powerful predictor of loss activity, the data shows this, but it’s another debate on whether or not it’s the “right thing to do”. And I guess if we going to debate that we might as well include gender and marital status.

  • January 15, 2021 at 4:21 pm
    Just-the-Facts says:
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    Many drivers question whether their credit ratings really have any direct connection to their odds of filing a claim with their auto insurers. In fact, there is a very strong connection. A 2003 study conducted by EPIC Actuaries, LLC on behalf of four auto industry national trade associations looked at a sample of 2.7 million insured autos and their drivers. Even the researchers were surprised by the results. Not only was driver’s credit history highly correlated with insurance losses, but it’s one of the three most important risk factors for each of the six types of insurance coverages included in the study. Credit history was a better predictor of claims than insureds’ driving records. Results of the research were consistent from region to region and from state to state. They also confirm an earlier, smaller study by University of Texas researchers looking at just Texas drivers. Around 30 different studies of credit scores and auto claims have found similar correlations.

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