|
|
FOR IMMEDIATE RELEASE |
|
CONTACT:
Victoria L. Stanish |
State Rep. Jesse White
|
|
|
|
|
|
|
Rep. White introduces legislation to lower car insurance premiums
HARRISBURG, June 13 – State Rep. Jesse White, D-Washington/Beaver/Allegheny, has introduced legislation that would prohibit insurance companies from using a person’s credit score to determine how much of a premium they have to pay for automobile coverage.
The bill (H.B. 1410) would prohibit insurance companies from using a credit score or other information contained in a credit report to cancel, issue, renew, impose a fee on or apply a rating factor to an automobile insurance policy.
He said the majority of auto insurance companies and an increasing number of home insurers put people’s credit information through a formula to get an “insurance risk score.” That score is used to determine how likely people are to file a claim on an insurance policy and, as a result, how much to charge them in premiums.
“Even people with no blemishes on their driving record could end up paying a higher premium because of the way insurance companies are computing their insurance scores. And the worst part is that most people don’t even know that their credit histories affect their insurance premiums because insurers are not required to disclose their scores or explain how they were computed,” White said.
According to Consumer Reports, the factors used to determine insurance credit scores vary widely from company to company, and the information is weighted differently than when traditional lenders determine credit ratings.
“The information being used to determine auto insurance premiums has nothing to do with whether somebody is a responsible driver with a good record,” White said. “It’s just an instrument to drive up premiums for consumers.”
The bill is currently under consideration by the House Insurance Committee.
###vls/2007/mjh
l:\print\releases\creditscore.046