WARREN, PRESSLEY, MEMBERS OF CONGRESS PROBE INSURANCE COMPANIES ON USAGE OF CREDIT-BASED INSURANCE SCORES AS COSTS RISE

The following information was released by the U.S. Senate Committee on Banking, Housing, and Urban Affairs:

"Insurers should not charge consumers higher premiums simply because of their personal credit history, which could have been impacted by job loss, a surprise medical bill, predatory lending, or simply inaccurate information, rather than the actual risk associated with a home."

Washington, D.C. Today, U.S. Senator Elizabeth Warren (D-Mass.), Ranking Member of the Senate Banking, Housing and Urban Affairs Committee, and Representative Ayanna Pressley (D-Mass.) led 18 other members of Congress in a set of letters to USAA, State Farm, Progressive, Liberty Mutual, Farmers, and Allstate requesting information on the usage of credit-based insurance scores in homeowners insurance underwriting and pricing.

In the letters, the lawmakers underscored concerns that insurance companies are unfairly jacking up rates based on customer credit history: "Property and casualty insurance products price the risk of loss due to damage to a property and its contents; and unlike debt, these products do not hinge on a customer's ability to repay or carry the risk of defaulting on a loan. Despite this, recent reporting indicates that Americans with weaker credit history pay significantly more for homeowners insurance, all other characteristics of the policyholder and property held equal."

"Insurers have cited increasing climate-related disasters along with rising building and reinsurance costs as the key sources behind rising homeowners insurance premiums. Yet recent research shows that credit scores impact homeowners insurance premiums as much, if not more than, disaster risk in many parts of the country," continued the lawmakers.

"Insurers should not charge consumers higher premiums simply because of their personal credit history, which could have been impacted by job loss, a surprise medical bill, predatory lending, or simply inaccurate information, rather than an actual risk associated with a home," the lawmakers wrote.

The lawmakers called on the insurance companies to provide information on how they use credit-based scoring when offering or pricing homeowners insurance policies, requesting responses from the companies by August 17.

The letters are cosigned by Senators Richard Blumenthal (D-Conn.), Tammy Duckworth (D-Ill.), Ruben Gallego (D-Ariz.), Adam Schiff (D-Calif.), Chris Van Hollen (D-Mary.), and Ron Wyden (D-Ore.) and Representatives Andre Carson (D-Ind.), Sean Casten (D-Ill.), Sylvia Garcia (D-Tex.), Al Green (D-Tex.), Pramila Jayapal (D-Wash.), Jim McGovern (D-Mass.), Alexandria Ocasio-Cortez (D-NY), Ilhan Omar (D-Minn.), Shri Thanedar (D-Mich.), Rashida Tlaib (D-Mich.), Bonnie Watson Coleman (D-NJ), Nikema Williams (D-Geo.).