, and your insurance provider is more likely to lose money by covering you. To make up for that potential loss, the company will raise your premiums—the lower your score, the more you pay.
Your credit history affects your insurance premiums differently based on where you live. But the CFA report shows that in some states, your credit score alone could cause your rate to double.
The state of credit-based insurance in America
There are already limits on how your credit score can affect your insurance in Oregon. Insurance companies can’t deny your application or refuse to renew it based on your credit score. Similar laws also exist in Illinois, New York, and Utah.
These are only a few of the many states currently tackling credit-based insurance. According to
called the PAID Act in February. The bill would outlaw the use of credit scoring for setting insurance rates all over the U.S. It’s currently in the hands of the House Subcommittee on Consumer Protection and Commerce.
"B.A., English Literature, MedAndrew Koole is an insurance writer who specializes in writing automotive news articles. Andrew’s mission is to create informative and instructional content car owners can use to reduce costs, master repair skills, and learn more about the automotive industry. Andrew has published over 600 articles for Jerry on topics ranging from automaker history to car insurance deductibles. Before joining Jerry in 2021, Andrew split his time between freelance writing in the entertainment and travel industries and creative writing in poetry and fiction. His writing is featured on a variety of arts and travel websites, including his own Ponytail Press.