For Consumers

Credit scoring and insurance

On Aug. 29, 2022, Thurston County Superior Court issued a final order overturning Insurance Commissioner Mike Kreidler’s ban on using credit scores to set insurance rates. Commissioner Kreidler has chosen not to appeal the court’s decision.

We wanted to cut through the confusion of the recent court decision by answering common questions insurance consumers are asking our office and their insurers. 

The facts about the Office of the Insurance Commissioner's credit scoring ban

I understand the new rule to ban insurers from using credit scoring was overturned by a judge?

The rule is no longer in effect. On Feb. 25, 2022, the Thurston County Superior Court granted a temporary stay of the new rule, which means it was paused. On July 29, the court ruled that Commissioner Kreidler acted in good faith, followed the legal steps in rulemaking, but exceeded his authority. On Aug. 29, the court issued a final order overturning the ban on credit scoring and the commissioner has chosen not to appeal the decision. 

 

Why is my premium going up? My company told me it’s because of your credit scoring rule.

When Thurston County Superior Court granted a stay on the credit scoring ban on Feb. 25, 2022, insurers could go back to using credit scores to set their rates. They’ve been able to do so since then. All they have to do is submit a rate filing to our office to add credit back to the way they charge insurance premiums. The decision for insurance companies to use credit information rests with them. Ask your insurance company to explain to you the factors it used to determine the rates for your premium. If the company refuses to provide an explanation, you do have the right to file a complaint with our office about this matter. 

 

What can I do to lower my premium?

It doesn’t hurt to ask your insurance company how you can lower your premium. You might think about increasing your deductible or dropping different coverages in your policy. You also have the right to shop around for a better deal for coverage with a different insurance company.

 

Now that the credit score ban is overturned, will my insurance company owe me a refund?

Under current regulations, your insurance company will not owe you a refund now that the ban is overturned.  

 

If there’s no ban and an insurance company is not using my credit like they were before, wouldn’t it be illegal for them to not consider my credit when rating my policy?

It’s not illegal. It’s up to the insurance company, as it's always been, to decide if they want to use credit as a factor in the premium they charge. If they don’t want to, an insurance company is not required to use credit information. Please note, our agency is working on a transparency rule to make companies provide this information when rates change.