Insurance Co. using credit scores to determine insurance rates
Posted Thursday, November 05, 2009 by Ed Harper
I am a big proponent of not utilizing debt to secure the items we want. That is why the growth of big government and their wasteful practices with our tax dollars is so frustrating. Also, when consumers are penalized for not carrying debt, it is upsetting to me.
Insurance is set up for the greater common good by spreading out the risk of catastrophe to the many. It is a social mechanism designed to protect consumers – not take advantage of them. Insurance helps us in two ways – We are either the recipients of catastrophe (I’m trying not to say victims) or as citizens who are liable for the negligence of our actions.
Thus, insurance is to provide some comfort in the time of need. It is in all of our interests for others to be well insured. Insurance should be affordable and available to all. However, insurance companies recently have utilized credit ratings to raise or in a rare case lower insurance premiums. Many of us Dave Ramsey fans, of less debt being better debt, often pay the penalty by having not-so-good credit ratings because of the lack of debt.
Just because one has a good credit history does not mean they have a good credit score. Insurers should not penalize individuals who do not use debt to raise their insurance premiums. Next time I shop for my automobile insurance and homeowners insurance, I will be sure to ask if the proposal carries with it a credit score check.
Contact Harper Law, PLLC if you have any insurance questions or concerns.
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