Insurance companies often use a customer’s credit score to price an auto or home policy. A law passed last year allows customers to request a yearly re-price if they feel their credit score has improved enough to qualify them for a new rate. A recent survey of major insurers showed discounts were given in more than 8,000 instances last year. The average policy holder saved $100. More than one-third of customers who requested the re-rate ended up qualifying for a lower premium. The law does not require insurance companies to notify customers of their right to request a re-rate but some do so voluntarily. Customers cannot be charged more as a result of a re-rate.
It’s been a controversial issue in Oregon and throughout the U.S. In 2006 Oregon considered a proposal that would have barred insurance companies from using credit scores to determine premium rates. However, the measure was soundly defeated by voters. California and Massachusetts are the only two states that prohibit insurance companies from considering credit scores for both home and auto policies. Maryland bars the practice for homeowner coverage. Hawaii prohibits it for auto coverage.
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