State Insurance Commissioner prohibits insurers from using credit scores to set rates

Mar 23, 2021, 5:11 PM

credit scores, credit cards...

Credit cards in a wallet. (Photo by Joe Raedle/Getty Images)

(Photo by Joe Raedle/Getty Images)

An emergency order issued Tuesday demands that insurance companies stop using credit scores to help set auto, renter, and homeowner rates in Washington state.

State Insurance Commissioner Mike Kreidler says credit scores are not a fair way to determine insurance rates, especially during a pandemic. He says he has a duty to protect consumers in emergencies. Additionally, state law prevents prevents insurers from charging different rates to similar groups of people for the same coverage.

“They can challenge, and if they do, we’ll be fully ready to meet them in court,” Kreidler said.

WA Rep: Bill ending use of credit scores for insurance would lead to rate increase for older drivers

Good drivers with bad credit, for example, are often charged extra for auto insurance, but Kreidler’s emergency order stops that practice. He says some good drivers with low credit scores pay nearly 80% more for mandatory auto coverage.

“Look at what people do when they drive a car, don’t take a look at credit and make an assumption that any individual out there that has a low credit score, it’s purely because of personal choices,” Kreidler told KIRO Radio.

“It’s not fair. It’s a bias against low-income people and making judgments about them,” he added.

Kreidler’s directive applies to all vehicle, renter, and homeowner policies. The rule takes effect immediately and lasts for 120 days. He says he’s looking for a permanent solution after proposed legislation on credit scoring and insurance prices failed to pass out of committee by the deadline.

The KIRO Radio Newsdesk contributed to this report.

Local News

FILE - The Senate Judiciary Committee's ranking member Sen. Dianne Feinstein, D-Calif. returns on C...

Associated Press

Democratic Sen. Dianne Feinstein of California, an advocate for liberal priorities, dies at age 90

U.S. Sen. Dianne Feinstein of California, a centrist Democrat who was elected to the Senate in 1992 in the “Year of the Woman” and broke gender barriers throughout her long career in local and national politics, has died. She was 90.

2 hours ago

(Photo from KIRO 7)...

Colleen West, KIRO 7 News

Bellevue Police warn of jewelry-for-cash scam targeting good Samaritans

Police are seeing a retuning scam in Bellevue that preys on good Samaritans, and it’s similar to one that’s been happening for years.

3 hours ago

BRAZIL - 2023/09/26: In this photo illustration, the Microsoft Bing logo is displayed on a laptop s...

Associated Press

Apple leverages idea of switching to Bing to pry more money out of Google, Microsoft exec says

Apple was never serious about replacing Google with Microsoft’s Bing as the default search engine in Macs and iPhones, but kept the possibility open as a "bargaining chip'' to extract bigger payments from Google

4 hours ago

Image: A Seattle Police vehicle...

Frank Sumrall

Report: Seattle Police ended contract with AI service after Auderer’s comments

SPD canceled its contract with Truleo less than a month after Officer Daniel Auderer's comments about Jaahnavi Kandula's death were captured, a report says.

14 hours ago

Washington wildfires...

Ted Buehner

Maui and Spokane: 2 public warning systems and the need for preparedness

The tragic wind-whipped Maui wildfire last month took many lives. How does the public warning system here shape up in comparison?

16 hours ago

spd auderer...

Frank Sumrall

Seattle Police Officer Daniel Auderer reassigned

Daniel Auderer, the officer who made inappropriate comments over the death of Jaahnavi Kandula, has been reassigned to a non-operational position.

18 hours ago

Sponsored Articles

Swedish Cyberknife...

September is Prostate Cancer Awareness Month

September is a busy month on the sports calendar and also holds a very special designation: Prostate Cancer Awareness Month.

Ziply Fiber...

Dan Miller

The truth about Gigs, Gs and other internet marketing jargon

If you’re confused by internet technologies and marketing jargon, you’re not alone. Here's how you can make an informed decision.

Education families...

Education that meets the needs of students, families

Washington Virtual Academies (WAVA) is a program of Omak School District that is a full-time online public school for students in grades K-12.

Emergency preparedness...

Emergency planning for the worst-case scenario

What would you do if you woke up in the middle of the night and heard an intruder in your kitchen? West Coast Armory North can help.

Innovative Education...

The Power of an Innovative Education

Parents and students in Washington state have the power to reimagine the K-12 educational experience through Insight School of Washington.

Medicare fraud...

If you’re on Medicare, you can help stop fraud!

Fraud costs Medicare an estimated $60 billion each year and ultimately raises the cost of health care for everyone.

State Insurance Commissioner prohibits insurers from using credit scores to set rates