OLYMPIA, Wash. – Insurance Commissioner Mike Kreidler is calling for a ban on the insurance industry’s controversial practice of credit scoring. A hearing on the legislation, HB 2513
, is scheduled for tomorrow, Jan. 20 at 6 p.m. in Olympia.
“Thousands of consumers have contacted my office over the last several years complaining about their insurance company’s use of credit scoring,” said Kreidler. “They say, ‘I pay my bills on time, I pay my premium, have never filed a claim or had a ticket – why is my premium going up?’”
Despite strong consumer protections enacted eight years ago by the Washington state legislature, insurers are relying more and more on credit scores. Today, some even consider your level of education. They take certain information in your credit history and other factors to create an “insurance score.” The factors they consider and how much weight they assign them vary, making it extremely difficult—if not impossible—for you to understand what steps you can take to improve your score and get a better rate.
Today, your insurance credit score can impact your auto and homeowners rates by as much as 50 percent.
“The industry’s reliance on this tool is startling,” said Kreidler. “Today, your insurance score can have a bigger impact on your premium than an at-fault accident,” he said. “The insurance industry should be embarrassed that it’s using such an arbitrary and unfair tool like credit scoring.”