Farmers Insurance Co. Using Credit Scores to Re-Rate Car Insurance Premiums
The Oregon Insurance Division fined Farmers Insurance Co. of Oregon $10,000 for raising a number of their policyholders’ car insurance rates using their credit score as a basis. Farmers Insurance was using consumer credit history to re-rate what they would pay for both auto and home insurance premiums in renewal and re-rate cases.
Credit Scores Determine Auto Insurance Premiums
Oregon state laws allow insurance companies to use credit scores to determine rates, but it does not allow the practice during a renewal period. But what will occur if all insurance providers start adapting the process. State governments would have no choice but to allow the rate adjustments, which can cost you big if you’re already paying higher rates on mortgages and auto loans due to poor credit history.
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