Credit scores may soon be off-limits for Florida insurers

02.23.09
By Sarah Beldo

Insurance regulators in Florida are trying to prevent insurers from using customers' credit scores to determine how much they pay for premiums.

Currently, insurance companies are allowed to use information contained in a person's credit report as a factor when underwriting claims and setting premium prices.

Consumer advocates and some lawmakers say this practice is not fair and that insurers should use customers' driving records for these purposes.

In response to these concerns, Florida's Office of Insurance Regulation held a hearing earlier this week to gather information on the practice, which some claim discriminates against certain groups.

Officials from firms including Allstate, Geico, Progressive, Nationwide and State Farm testified about how credit information helps them determine customers' risk.

Eric Lamb of Allstate said using this data is similar to using information about smoking - which insurers use to help determine life expectancy, the South Florida Sun-Sentinel reports.

But those who filed the bill say credit score information should be off-limits. "I've had customers with no tickets, no accidents, who could not qualify for preferred rates because of their low credit scores," Representative Priscilla Taylor said at the hearing, according to the news provider.

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Insurers can currently use credit scores to set prices for premiums