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Consumer Federation of America released the findings detailing
the impact of auto insurers’ use of consumer credit information
on good drivers with only fair or poor credit scores.
“On average in Illinois, they found that drivers with poor
credit pay $491 more than the same driver with the same clean
driving record with excellent credit, so it's a 116% increase,
more than double,” said Abe Scarr, Illinois director of the
consumer advocacy organization Public Interest Research Group.
The overwhelming majority of auto insurers practice this
discrimination. Only California, Hawaii and Massachusetts
prohibit the use of credit information in auto insurance
pricing.
Scarr said there needs to be more regulation of car insurance
companies.
“There's only one other state that has as little regulation of
car insurance rates as Illinois, it's just us and Wyoming,”
Scarr said.
A measure that would ban discriminatory pricing for car
insurance using non-driving factors like a person’s credit score
stalled at the Illinois statehouse last spring.
The bill’s sponsor, state Rep. Will Guzzardi, D-Chicago, said he
plans to reintroduce the legislation.
"Once again, the data bears out that excellent drivers are being
charged staggering premiums only because their credit scores are
low," Guzzardi said in a statement. “States need to regulate
this kind of unfair pricing practice, and I plan to work hard to
see that Illinois does so."
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