In a column in this weeks edition of National Underwriter, Associate Editor Mark Ruquet talks about how personally he and other consumers take the use of credit scoring when their insurance policies are priced. Its a dynamite topic, sure to generate plenty of gripes among carriers as the issue is distributed at this weeks NAMIC conference.
In his column, Mark points out that most people are keenly sensitive about how their credit information is used, especially when the application is indirect, as with insurance underwriting. Read the column here, and let me know what you think on the subject.
I personally think credit scoring is one of those issues where insurers might have the facts on their side, but not the politics. Credit scores are so often inaccurate that people just dont feel comfortable having their insurer include it as a factor. There is also the sense that people often have a credit crisis at some point in their lives in this borrow now, pay later society, but do not believe it should haunt them the rest of their livesespecially when it comes to setting their insurance rates.
Sure, credit scoring is only one factor of many insurers employ, but it must be a pretty important one for carriers to fight so vigorously for the right to keep its use from being banned.
When push comes to shove, I would not oppose the use of credit scoring, as long as carriers are upfront about it. But I have a feeling that in the long run, at least some states will continue giving insurers a hard time.
How can suspicious consumers and politicians be won over on this controversial topic that is so near and dear to the industry's heart? What are your thoughts?
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