A growing number of personal auto and homeowners insurance companies have begun looking at consumer credit information to decide whether to issue or renew policies, or to decide what premiums to charge for those policies. This brochure is designed to help you understand, in general terms, how your credit information is being used for personal auto and homeowners insurance, and how it may affect your insurance purchases.
Is it legal for an insurance company to look at my credit information without my permission?
Yes. A federal law, the Fair Credit Reporting Act (FCRA), states that insurance companies have a “permissible purpose” to look at your credit information without your permission. Insurance companies must also comply with state insurance laws when using credit information in the underwriting and rating process.
Why are some insurance companies using credit information?
Some insurance companies believe there is a direct statistical relationship between financial stability and losses. They believe that as a group, consumers who show more financial responsibility have fewer and less costly losses, and therefore, should pay less for...
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