Washington’s Insurance Commissioner issued an emergency order in March prohibiting all insurance companies from using credit history to determine premiums or coverage eligibility for personal autos, motorcycles, RVs, homes, mobile homes, condos, and renters for new business effective 06/20/2021 and renewals sent out after June 20, 2021.
For the past 20 years, insurance companies have been able to use a person’s credit history as part of their individual scoring process to price policies. Credit history has proven to be a strong indicator of future claims and, thus, has been used to lower premiums for many people.
Premiums at renewal can go up or down for various reasons. Removal of the use of credit will have an impact on almost everyone’s premiums. For many people, insurance companies are able to use credit to provide an extra discount to their insurance premium. So, without the use of credit, their premiums can increase. For others, their premiums will go down as the result of this change.
The Insurance Commissioner’s emergency rule required insurance companies to take credit out of their pricing model without making any other changes. Insurance companies are now in the process of filing with the Insurance Commissioner additional changes to these pricing models to ensure they are accurate and fair. You should be aware that the price for your insurance policy will probably change again next year because of these additional adjustments.
As an independent agent, we represent numerous high quality insurance companies so we can help you find you the right policy at the right price to protect you and your family.