Big Changes for Car Insurance

Right now in most states across the nation, how you pay your bills can affect how much you pay for car insurance. Some people think that it has to do with how they drive – well it does, but credit scores play a lot into how much you end up paying. However, many people think that the one has nothing to do with the other, and Delaware legislators seem to agree.

A bill is currently sitting in the Senate that would ban insurance companies from looking at your credit score to determine how much you would pay for car insurance. Two years ago, the had gotten together to see what the good and bad there was in using them, and they have come to the conclusion that it is in the insured’s best interest not to have them used, and it is in the car insurance’s best interest to use them.

Senate Bill 31 prohibits the use of credit scores in all auto and home insurance rate setting. John Flaherty, a lobbyist for Common Cause of Delaware, said that "auto insurance premiums should be based on your history as a driver, not on whether you are unable to pay your bills because of hard times or you live in a certain ZIP code.” Many agree with him.

The car insurance companies say that they use the scores to give discounts to those that have great credit. They say that it is a legitimate tool that the insurance companies need when setting rates and they ask that it not be removed. The companies say that if the bill is passed, many policy holders would see an increase in their car insurance premiums.
 

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