Jesse Jones

Why some people with good credit are still seeing sky-high insurance premium increases

Sedro-Woolley, WA — Eric Troili has a problem with his insurance company.

“Everybody who’s got homeowner’s insurance and renter’s insurance and personal car insurance. We all have a problem,” says Troili.

See, the Sedro-Wooley resident believes his insurer is not giving him the full story about an increase in his rates.

“I can handle the truth,” says Troili. “If I get lied to, kinda takes it up to another level.”

So before Troili goes full Jack Nicholson, let’s explain what’s happening here.

Last Summer, Washington Insurance Commissioner Mike Kreidler placed an emergency order stopping insurers from using credit scores to determine rates. He said the practice hurts people of color and would impact those who’ve taken a financial hit due to COVID.

“We’re very sensitive to the people who are being harmed. Let’s get this out there before any more people are hurt,” Kreidler said last March when he announced the rule.

The insurance lobby predicted the move would cause rates for many people with good credit to go up.

“There’s a high risk that the price of insurance will be going up because credit scores have been shown to be a way in which insurers can help reduce the cost of insurance for consumers,” said Kenton Brine, president of the Northwest Insurance Council.

But in October, a Thurston County judge struck down the Commissioners order.

However, Troili received this explanation for the higher rates emailed from his State Farm representative:

“… you were wanting some additional information about the WA legislation that banned the use of credit in insurance pricing. Insurance companies lobbied heavily against this, but unfortunately it still passed, so many people with good credit are seeing price increases.”

In fact, no law was passed on insurance credit scoring.

“Trying to flower up a rate increase when really they were going to increase the rates anyways. It’s likely they’re going to have to increase their rates because of market forces,” Troili says.

State Farm did not directly answer questions about the email. But they did say this in a statement:

“…we are making decisions on how to best serve our customers’ long-term needs. … Any changes will first be communicated to our agents so they are positioned to assist our customers during these uncertain times.”

Turning to the Northwest Insurance Council, President Kenton Brine says insurers are telling the truth. They set the rates under the rules that were in place at the time.

“So insurers are on pins and needles because that rule, we had anticipated based on the commissioner’s own comments, would have been adopted in late November or not later than the first of december to go into effect January first,” Brine says.

Two other issues: rate changes can take up to a month to kick in, and at the end of all of that Commissioner Kreidler could double back and try to make the credit scoring ban a permanent rule.

“Some insurers are concerned that if they put those kinds of rates back in play, they’ll be required to pull them back out again,” says Brine, “further frustrating, confusing and angering their customers.”

For those who have seen their rates go up because of the ban on the use of credit scores, we’ve learned that some companies have told the Insurance Commissioner’s office that they are going back to their old rates that include credit scoring.

That means those with good credit can shop around.

In the meantime, Kreidler is asking insurers to answer questions about their financials during the emergency rule, and how they communicated to their policyholders about it.

“That’s pretty straightforward,” Kreidler says.

He says only five percent have responded. And if more don’t…

“I’d have to say hey, you obviously don’t care so let’s go ahead with the rule,” Kreidler says.

For now, Eric Troili from Sedro-Woolley has one more request on behalf of people who have to pay higher rates when the court struck down Kreidler’s order.

“We should be getting a credit,” says Troili. “Credit me. Credit all of us.”

Here’s the list of insurers that have gone back to using credit scoring to calculate premiums:

  • American Commerce Insurance Company
  • Commerce West Insurance Company
  • Integon Preferred Insurance Company
  • Integon National Insurance Company
  • Progressive Casualty Insurance Company
  • Progressive Classic Insurance Company
  • Progressive Direct Insurance Company
  • Progressive Max Insurance Company
  • The Cincinnati Insurance Company
  • Allstate Vehicle and Property Insurance Company
  • Allstate Fire and Casualty Insurance Company
  • Commerce West Insurance Company
  • Stillwater Property and Casualty Ins Co
  • Stillwater Insurance Company

We’ve also learned there are at least four other credit scoring bills being proposed in the state legislature. Commissioner Kreidler is fighting all of them. We’ll be following their progress and will keep you updated.

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