4 ms·
> most states make it illegal for determining insurance premiums. That's surprising to me given all of the other ways credit scores are used. Is there a ration
by rurp 5y ago
> most states make it illegal for determining insurance premiums.
That's surprising to me given all of the other ways credit scores are used. Is there a rational reason to allow credit scores to be factored into hiring decisions but not insurance premiums? Or is this just the law being messy and inconsistent in reality?
- Step888 5y ago> Is there a rational reason to allow credit scores to be factored into hiring decisions... You'll have to be more specific. Because I live in a State where credit scores can not be used for hiring decisions unless you plan to give that person signatory powers over your company checkbook/company credit card, or unless that person works for law enforcement, or unless that person will have to deal with lots of cash at any one time, etc.
- CapmCrackaWaka 5y agoI was an auto insurance actuary in a different life. Most states do NOT ban the use of credit in auto insurance pricing, but there are some exceptions. My company actually decided not to do business in California because we could not use credit as a factor. The difference in premium due to credit could often be as high as 12x between the highest and lowest groups. Some states (Maryland comes to mind) do limit the maximum surcharges you can implement because of credit, although there are sneaky ways around this that everyone uses, like underwriting tiers (GEICO) or using credit in multiple places (Progressive).