Push for Change to Mass. Auto Insurance Law Highlights Controversy over Credit-Scoring

Boston -- Free-Press-Release.com-- Nov 3, 2011 -- A recently announced change in tactics by the Massachusetts Association of Insurance Agents (MAIA) in its efforts to prevent insurers from basing auto premiums in part on customers’ credit histories highlights the controversy over the practice, according to Online Auto Insurance.

MAIA announced last week it is abandoning a ballot initiative to outlaw the use of credit histories by auto insurers and is instead supporting a bill in the state legislature to prohibit the practice.

Massachusetts is one of three states—along with California and Hawaii—in which auto insurers may not consider a consumer’s credit history and any blemishes it contains when setting policy rates.

The size of Massachusetts car insurance quotes can still be affected by a whole spectrum of other factors, including a policyholder’s age, gender, marital status and driving record. Mileage also plays a part, according to industry experts, with those who log fewer miles often qualifying for discounts. And where a customer lives is a key factor because insurers look closely at the frequency of accidents, car thefts and other losses in a geographical area when figuring out their own risk.

MAIA officials are determined to ensure that credit histories do not become one of those factors.

An administrative regulation already prohibits insurance companies in the Bay State from using a consumer’s credit score and related information to help set rates.

Source: http://www.mass.gov/?pageID=ocaterminal&L=4&L0=Home&L1=Consumer&L2=Insurance&L3=Automobile+Insurance&sid=Eoca&b=terminalcontent&f=doi_Consumer_css_auto_consumer_billofrights&csid=Eoca

Insurers have long supported the use of such information, claiming statistics show that a person’s credit status is a reliable predictor of risk that allows companies to more precisely set rates.

But MAIA and other critics say the practice leads to low-income motorists paying more by basing rates on factors that have nothing to do with driving.

To learn more about this and ways to compare quotes from a variety of companies in Massachusetts or any state, readers can go to http://www.onlineautoinsurance.com/massachusetts/ where they will find informative resource pages and a rate-comparison generator that can help users quickly evaluate their coverage options.

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Online Auto Insurance
Gregor McGavin
http://www.onlineautoinsurance.com/