PORTLAND, Ore. Jan. 25, 2011
affordable car insurance $800,000
Insurers’ use of credit information to help set rates has become a controversial topic in recent years, according to Online Auto Insurance News. Some consumer advocates and rights groups have said that certain demographics tend to have negative credit history and end up bearing the brunt of the controversial practice.
But a number of studies — including a2007 report by the Federal Trade Commission — have shown that credit information is an effective predictor of an individual’s future claims trends, and as such the majority of states allow insurers to incorporate credit data into rate-calculation formulas.
According to the state, the rate at which policyholders successfully lowered their rates through a reassessment varied among the 11 companies that participated in the survey. "Typically, one-third to one-half of policyholders who requested a re-rating qualified for a lower premium," stated the DOI in a release.
SOURCE Online Auto Insurance, LLC