The debate of rating auto insurance in Ferndale, and around Michigan, is a very hot topic. Most major insurance companies use a client’s credit score as an aspect in determining risk and, in turn, premiums. Many consumer advocate groups and Michigan’s head Automobile and Home Insurance Consumer Advocate feel that using credit reports is an unfair factor in determining the likelihood of an insurance claim.

Today the AP reported that this case is going to the Michigan Supreme Court. Check back to Ferndaleinsurance.com as this develops.

 

Marty O’Neill, Insurance Agent

Ferndale, Michigan

 

Associated Press

Lansing — The Michigan Supreme Court is considering whether insurance companies can use customers’ credit scores to set home and auto premiums.

The high court will hear oral arguments Wednesday morning.

The state insurance commissioner banned credit-based insurance rates in 2005 after calling the practice unfair, discriminatory and unreliable. A county judge blocked the ban. But the Michigan Court of Appeals reversed the ruling last year.

Most large insurers in Michigan use some form of credit scoring to give premium discounts. Generally, the better one’s credit score, the lower a customer’s insurance premium will be.

Insurers are still using credit scores pending the outcome of the appeal to the Supreme Court.

 

This entry was posted on Wednesday, October 7th, 2009 at 5:30 pm and is filed under Auto Insurance, News. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.