Wednesday, January 27, 2010

Insurance news: Insurer touts the fact that it DOESN'T use credit scoring

an interesting development in the debate over credit scoring, an insurance-industry practice that Washington state Insurance Commissioner Mike Kreidler is trying to ban.

Some background: Many insurers now pull your credit information and use that as a key factor to determine your rates for insurance, including auto- and homeowners' coverage. Kreidler argues that the data has nothing to do with how you drive or care for your home; the companies that use it argue that credit is valuable information that's closely correlated with claims and risk.

This morning, Los Angeles-based Workmen's Auto Insurance Company issued a press release saying that it supports the ban and "has never used an individual's credit when considering their eligibility or determining their insurance premium."

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