Aug 02
Credit and Auto Insurance
There have been a number of news stories lately about the fact that auto insurance companies evaluate credit histories as part of the rate-setting process for customers, and as part of the renewal decision on insured parties. There is also at least one class-action suit against the industry because of this process.
The question arises as to why credit rating would apply to a person’s acceptability as an auto insurance risk. The practice arose from studies that analyzed a credit histories and tendency to file auto insurance claims. One study evaluated 170,000 individuals and established that persons with certain types of credit histories were more likely to file auto insurance claims than others.
More after the jump…
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