Over two decades ago, when insurers first began using credit score formulas to underwrite personal auto and homeowners' coverage, the public backlash was palpable—and so was the ire of many independent insurance agents, who were forced to explain its use to customers.
Today, although still not universally embraced by independent agents, credit-based insurance scoring has come to be accepted and in many cases, respected by the same producers who once were vocal opponents.
Even the lackluster economy has failed to unseat its use. "All evidence is that insurance scores, because they're different from lending scores, have not spiked down the way that some people predicted because of the down economy," said David F. Snyder, AIA vice president and associate general counsel. "Instead, they have played a positive role in the market, providing most people with lower rates and supporting broad availability of coverage. "
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