|Targeted News Service|
New research shows that, holding all other factors constant, the two largest auto insurers,
"Americans reject auto insurer use of credit scores because they don't think someone who's had difficulty paying debts should automatically be charged higher auto insurance premiums," said CFA Executive Director
The CFA report asked three questions: First, do low- and moderate-income drivers tend to have lower auto insurer credit scores? Second, what is the impact of auto insurer use of these scores on actual prices? And third, do Americans approve of auto insurer use of credit scores in their pricing policies?
The report summarizes and references more than a decade's worth of research by state insurance departments and the
Auto Insurers Charge Higher Prices to Drivers With Lower Credit Scores
FICO estimates that, where permitted, 95 percent of auto insurers use credit scores in their pricing of insurance policies. However, this use is difficult to research because auto insurer websites do not permit consumers to input credit scores. So, CFA purchased price data related to credit scores for the two largest auto insurers,
Analysis of these price data reveals a strong relationship between credit scores and annual auto insurance premiums, except in