Liberal MPP Mike Colle introduced a private member’s Bill on November 4, 2010, calling for a ban on the use of credit scores to determine property insurance rates.
The Bill is posted on the Ontario Legislative Assemby’s Website.
Support Bill 130 by emailing MPP Mike Colle at mcolle.mpp.co@liberal.ola.org.
Credit Scoring is not necessary in the rating and selection of Home insurance. There are multiples of criteria that are used in the pricing and selection of personal property risks without usinhg credit.
Exactly. Other methods are a much more appropriate and less discriminatory way to rate insurance.
I strongly disagree with Insurance companies being able to use a person’s credit score to reflect the premiums charged on their Homeowners/ Property Insurance. People often have a poor credit score due to various reasons, such as a marital breakup, loss of a spouse, loss of a job, or illness and why should they be impacted with higher insurance premiums when they are already suffering often mentally and financially. These insurance companies should be prevented from being able to access someone’s credit score immediately.
We agree. There are certain privacy disclosure rules required by Federal privacy legislation that aren’t being followed by many insurers who use credit.
As an insurance broker and a consumer, I strongly oppose the use of credit scores to determine property insurance premiums. It inflates the premiums unfairly, generally on the second term of the policy, which means that the client is blindsided by a massive premium increase on the first anniversary of taking out a new policy.
As well, because of the large discounts associated with combining home and auto with one company, it allows the companies who are using the credit scores to partially control the auto risks it writes, without utilizing their decline rules.
Yes. This is one of the main reasons IBAO wants this banned from personal property insurance. Its being used as a back door by insurers.
I`m fed up with insurance companies constantly raising rates for one reason or the other, especially unfairly using credit rfating history as they don`t know the full story. Every year companies say thet need increases, yet the bottom line every year is still a profit. Since I`m an insurance broker, why should companies get increases when they do less & less and expect the brokers to do the underwriting and not increase any commissions.
I`m not proud to admit that I`ve been in the industry since 1966 and it never got better. I hope I can get out of the unfair rat race & retire,, then I`ll be in the hands of the govt and their use of the working class poor paying for the rich who write everythng off and those on welfare. We are the ones who have to pay the difference . Let the govt. and insurance companies go after the rich who can afford it
We’re still hopeful. Newfoundland and Labrador just implemented a complete credit ban. And remember, Ontario did take a big step in 2005 by being the first to ban it from auto.
I would also like to state that most of those that find themselves without health insurance are usually students, self-employed and those that are unemployed. More than half on the uninsured are under the age of 35. They do not come to feel they are needing health insurance because they are young along with healthy. The income is frequently spent on housing, food, and entertainment. Many people that do go to work either entire or as a hobby are not supplied insurance by their jobs so they head out without due to the rising price of health insurance in america. Thanks for the suggestions you talk about through your blog.
Glad you found it helpful.
Many, but not all, insurance companies are using credit scoring on property insurance in Ontario. The issue I have, as an insurance broker, is that use of credit scoring seems to outweigh all the other factors in determining the price of a property risk.
Some direct writers have up to a 195% surcharge on property insurance if your credit is bad. The problem with relying heavily on one aspect to determine price is that is skews results. It’s not fair or balanced and it results in further discrimination to those with poorer credit ratings.
If we look at oil tanks, for instance, there is a direct causal correlation between the age of the tank and oil leaks. As oil tanks get older they rust, they degrade and they become more susceptible to leaks. That can easily be explained.
What Insurance companies have yet to provide is what is the basis for their correlation between poor credit scores and a propensity for claims? If the use of credit scoring for property insurance can’t be explained in clear terms to the public, like the oil tank example above, then this behavior harms the reputation of insurance in Ontario. Insurance gets a bad enough rap as it is without jacking up insurance rates without a plausible explanation.
Well said. Insurers are very secretive with their “proprietary algorithms.” Another reason it should be banned.
What is the point of asking for information that is not relevant to the risk carried? Why are insurance companies even thinking of putting themselves to this trouble? What is their justification for increasing the charge based on “credit score”, how do they define that term and what confidence can anyone have in that score?
Good questions. We encourage every consumer to be informed and ask this question of their insurer.
You got great points there, that’s why I always love checking out your blog.