Paying For Auto Accident Injury Coverage:Banning Credit-Based Premium Calculations? No Such Luck
One of the biggest current issues in the auto insurance industry is how insurance companies are using a wider and less relevant set of data to calculate costs for policy holders. In general, states seek to regulate the setting of premiums, to evaluate the practices of state insurers and “keep them honest” rather than allowing them to run roughshod over fair market practices. But although legislators try to make their mark on an industry known for its price ambiguity and complex use of big data, some of those “reforms” don’t seem to go very far, and the effort to do away with linking auto insurance rates and credit history is one of them.
Doctors, lawyers and others with a stake in the auto insurance industry might be interested in knowing what’s going on at a federal level as legislators keep looking at consumer costs for auto insurance. Even support workers like auto accident telemarketing staffers for chiropractors have an interest in keeping up on these kinds of proposals that can make a big difference to policy holders.
Auto Insurance Rates and Credit History: Bad Credit Customers Pay More
We know that several states allow insurance companies to look at a person’s credit score while figuring out their auto insurance rates. Insurance companies argue that those who pay their debts promptly have a lower chance of getting into accidents. However, consumer advocates and others argue that this is an arbitrary and unfairly selective way of singling out already struggling consumers for excessive costs.
This article from Bankrate.com shows how the controversial practice of credit-based auto insurance rate setting is practiced differently on a state a state basis.
Federal Law To Ban Credit Score Use Fizzles
A flurry of news stories in the summer of 2012 showed a bill going to the 112th Congress that proposed amending the Fair Credit Reporting Act so that auto insurance companies couldn’t use consumer reports, including forms of credit score research, in order to determine auto insurance rates. What media outlets failed to report on was that after moving to a House subcommittee in July of 2012, the bill essentially died. Like many other bills, HR 6129 was simply not taken up further by the American legislature, and since then, no one has announced plans to revive the idea that insurance companies shouldn’t be penalizing drivers for having less perfect credit.
All of this has an impact for individual drivers paying auto insurance premiums, as well as those they go to for frontline advice after an accident. Whether it’s a doctor or nurse, a medical tech, or an auto accident telemarketing professional referring accident victims to medical offices, some of the usual consultation might involve helping accident victims to understand the link between what they have paid in the past, and what they are going to receive in the future to help out with their medical bills. Auto accident victims and those involved in the care process have a common interest in analyzing whether the federal government or state governments will ever move on this important issue and others that affect auto insurance premiums, claims and payouts.