Proposal would keep insurance providers from using credit scores
INDIANAPOLIS (WISH)- You may not know it, but your credit history often plays a role in how much you pay for insurance.
An Indiana lawmaker wants to change that.
“I was shocked to find that out that actually my insurance rate could be a combination of a whole lot of things, which I think are valuable, but also whether or not I have a good credit score,” state Sen. Greg Taylor.
The Democrat senator from Indianapolis is fine-tuning legislation that would basically keep insurance companies from using your credit score when calculating your rates.
Taylor said, “I want to make sure that nobody can use a credit score because it doesn’t make sense. It just hurts people who have had problems or who are poor.”
Jenifer Groth, director of communication and outreach for the Indiana Department of Insurance, said, “Companies are not required to use credit scores in rating, but they are permitted to do so under Indiana Code 27-2-21.”
The department issued a bulletin for people about current state laws on insurance and your credit score.
Insurance agent Lucy Bolin with Access Auto Insurance said their business doesn’t check your credit.
Bolin said, “I know there are so many companies that they go through by the credit. The good credit you have, the good prices you’ll get or the best rates. Bad credit? You’re not going to get the really good price.”
Bolin favors the proposed bill. “I think it’s fine. I think it might help so many people.”
The change could also help auto dealers.
Matt Steinbrink, sales manager for Ed Martin Nissan on the east side, said, “On our end, I think it can only help us, as far as helping the consumer. In particular, if they don’t have the best credit history, they’re probably getting hit with higher interest rates and a higher monthly payment. then to have that affect their insurance rate as well, too. They’re getting hit twice. So it can only help them, it can only help us.”