Posted on 07/02/2021 2:31:01 PM PDT by PROCON
Developments continue around the efforts of Washington state’s insurance commissioner to ban insurance companies from using credit to set rates for auto, homeowners and renters insurance for three years.
Insurance Commissioner Mike Kreidler issued an order on March 23, 2021, that bans the use of credit in setting insurance rates for new and renewed policies as of June 20, 2021.
Insurance industry groups joined together to try to halt Kriedler’s plan. The American Property Casualty Insurance Association (APCIA), the Independent Insurance Agents and Brokers of Washington, and the Professional Insurance Agents of Washington filed a petition for declaratory and injunctive relief in early April with Superior Court in Thurston County.
On April 23, 2021, a Superior Court judge denied the request for a preliminary junction. Judge Mary Sue Wilson found that industry associations challenging the rule were unlikely to succeed with their arguments. The ruling means that Kreidler’s emergency rule is maintained.
(Excerpt) Read more at forbes.com ...
Good grief, credit scores tell creditors how reliable a person is to repay a debt.
Credit scores are used when buying houses, cars, obtaining a credit card or line of credit.
The reason I bring this up today is I got the following email from my insurance company today:
On March 22, 2021, the Washington State Insurance Commissioner issued an emergency rule. The rule states that as of June 20, 2021, no personal insurance company will be allowed to use a credit-based insurance score to determine personal insurance rates, premiums or eligibility for private passenger automobile coverage, renters coverage and homeowners coverage issued in the state of Washington. As a result of removing credit-based insurance scores from determining insurance rates, some members may experience a change in their premiums. For members with multiple USAA insurance products, this rule may have multiple impacts.I just checked my insurance renewal rate and it's going up.
I have no insurance claims, good credit, but now apparently I'm being penalized for being a responsible customer?
Perhaps I should be happy they haven't asked my skin color or this white guy would really get socked with an increase.
No you're not being penalized, you're happily subsidizing the insurance claims of people with bad credit and lifestyles. They will continue to live recklessly and spend money they don't have to enjoy life. That should make you happy that other people are enjoying life at your expense. Gives you a good felling, don't it?
They’ll still run the credit score and background check. MY bud runs a used car dealership close by and no dealership can afford to approve a lease based on “nothing”. Wa state has to figure out how “exactly” in court loser A who has $2000 unpaid parking tickets didn’t get a 2019 Jaguar based on a 400 credit score.
In the late 70’s and early 80’s, I saw a person get financed on a car with TWO (2) involuntary repo’s on their credit report. But the interest rate was eye-wateringly high.
SOMEONE will finance almost anybody if the market is allowed to work.
Is there a connection between credit scores and reckless driving, or other insurance claims?
I don’t know enough about the insurance business as to how they set premiums. I guess I’m surprised the credit score has been a big factor , at least in some states.
True. I’ve seen and heard plenty of car dealers ads who indicate that credit problems or bankruptcy are not a problem for them financing you.
“SOMEONE will finance almost anybody if the market is allowed to work.”
True. The way it works here in CA is 25% int rate is the “cap”. That’s why you see a LOT of “100% approval” notices. I get your down which is around %25, and get you on the int rate, dealership A makes money.
However, based on what he’s been telling me all year long. due to China virus, no repo outfit will go get the cars as they are liable to be sued in court, believe it or not. MOST times he called them to pay up (nicely), they would even LAUGH at them over the phone. True story.
“No you’re not being penalized, you’re happily subsidizing the insurance claims of people with bad credit and lifestyles. They will continue to live recklessly and spend money they don’t have to enjoy life. That should make you happy that other people are enjoying life at your expense. Gives you a good felling, don’t it? “
The above just about sums it up. Same with “student loan forgiveness”. The parents who scrimped and saved, didn’t drive a new car, go on expensive vacations, buy new furniture every two years because they were tired of the decor in order to put their kids through (ALONG WITH THEIR CHILDREN) will be paying for people who lived the high life.
Many years ago, a person I worked with calculated that he was an idiot for saving money to send his kid to school, because he had too much money to get a “needs based scholarship” for her. Had he bought a bigger house, new car, boat, etc. a few years earlier and no cash/savings he would have actually come out considerably ahead!
Probably. Irresponsible people tend to be irresponsible.
I seem to have some vague memory of talk about making landlords stop using credit checks for renters too in Washington.
They should not be using credit scores to set rates!!! I don’t care where you live, who you are, color, race, whatever, this hurts all of us.
Of course, insurance companies like any financial institution know that folks with good credit are usually more responsible and thus less likely to submit claims or get a speeding ticket which normally will raise your rates.
Churchill NEVER actually said this: capitalism is the most evil economic system ever devised by the mind of man, except for all of the others.
Behavior supportive of society is rewarded, behavior detrimental to society is punished. We are failing at this and actually getting worse at it daily - and that’s why things are the way that they are.
Just great - now I get to pay for everyone who doesn’t give a $hit.
I don’t think credit should be used for insurance. If you don’t pay, it gets canceled. It’s not like a home mortgage.
People do not have low credit scores because they are deadbeats. They can have low credit scores if the opt to not have a credit card, they don’t borrow money, don’t own a house, paid cash for their car, etc. So, for those bemoning this Washington law, should those people get charged a higher rate for their insurance? No.
You are correct, a very important exception to the rule.
Thanks for posting that. I was about to. I’m one of those weird Americans who doesn’t take on debt, doesn’t do credit cards, and that decision making hurts my credit score.
It actually makes sense. A person who makes good decisions with money and is responsible with it will generally be a person who does the same when driving a vehicle.
I’ll bet a credit score is a pretty accurate indicator of a customer’s likelihood to file a fraudulent insurance claim.
Kreidler is a fascist from way back. He forced pharmacies to carry the morning-after pill because they are “agents of the state.” Well, if that’s true, give them state benefits. And if any business needs a license to engage in business, ALL businesses are “agents of the state.”
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