Legislation to ban the use of credit information in underwriting auto insurance would only hurt consumers, the
The Prevent Discrimination in Auto Insurance Act, introduced in the House as H.R. 1756, is well-intentioned, but it is based on a misunderstanding of insurance underwriting and the role of consumer credit information in the process, said
"This bill would make underwriting less accurate and could lead to an increase in premiums for auto insurance policyholders," Grande said. "Study after study has repeatedly shown consumer credit correlates with auto risk, and for most Americans this connection leads to lower auto insurance premiums."
Specifically, Grande pointed to a study conducted by the
"There's been a great deal of misunderstanding about credit and insurance over the years, but the reality is the more useful and correlating information insurers have, the better they can price coverage, which is good news for responsible consumers," Grande said. "Banning the use of credit information in underwriting would only punish those drivers with good credit without benefitting consumers as a whole."
Congressional action also runs counter to the established state-based system of insurance regulation, Grande explained, which has protected consumers for more than 150 years. "State lawmakers and regulators who oversee the auto insurance industry better understand their local marketplace," he said, "Working together through the