Q: I have a perfect driving record and have been with the same company for 10 years. I recently learned the company is increasing my premiums because of some credit issues. What does this have to do with my driving?
— Andre Ledbetter, Ocean Park
A: Most insurance companies use consumer-credit history as one factor in setting premiums or deciding whether to offer insurance to a new customer, and they are not legally prohibited from doing so, according to the state Insurance Commissioner's Office.
Statistically, people with credit trouble are more likely to file an insurance claim, insurance companies contend.
But state Insurance Commissioner Mike Kreidler supports a ban on using credit scores in setting premiums, said spokeswoman Stephanie Marquis.
Your insurance company must provide a letter to you if you don't get the best rate or are otherwise negatively impacted by a decision. The letter must spell out why you're not getting the best rate, and the source of the negative information.
You can shop around for a new insurance company. Although most insurance companies look at your credit information, they don't all use it in the same way, Marquis said.
Make sure to get a copy of your credit reports to double-check their accuracy. You're entitled to a free report if a company takes adverse action against you, and you request your report from the credit bureau that provided the negative information within 60 days of receiving notice of the action.
Consumers also are entitled to one free credit report annually from each of the three major credit bureaus — another good way to monitor the accuracy of information in your reports.
For help call the insurance-consumer hotline: 1-800-562-6900. You also can get help or file a complaint online: www.insurance.wa.gov.
Jolayne Houtz, Seattle Times staff reporter. Have a question? Send it to heretohelp@seattletimes.com, or call 206-464-2525
