The vast majority of insurance companies have begun to use insurance credit scoring to determine eligibility and rates for homeowners and auto insurance. This insurance credit score is different from the credit score used by banks or lenders to determine credit worthiness. Insurance companies claim that they possess formulas that draw a cause-and-effect link between your credit history and your insurance risk. However, this logic defies common sense. How is a person who paid a bill late once, for example, any more likely to be hit by another driver or to have a hailstorm ruin their roof?

At Texas Watch, we believe that insurance credit scoring is a flawed tool used by insurance companies to unfairly deny coverage and increase rates. It is also discriminatory. Study after study has shown that credit scoring has a disproportionately negative impact on people with lower incomes, senior citizens, those who have experienced a medical bankruptcy, and racial minorities. As part of our common-sense insurance reforms package (see below), Texas Watch believes that insurance credit scoring should be banned.

Looking for helpful consumer tips on insurance and credit scoring? Visit our brand-new Insurance Tips page.

Have you been negatively impacted by insurance credit scoring? Please share your story with us.