Rates are rising because Washington's insurance commissioner Mike Kreidler has banned insurance companies from using credit scores to set rates The policy went into effect in late June. The cost of auto insurance is also rising steadily, both in Washington and across the country. As the cost of providing insurance increases, the premiums charged by insurers also increase. All insured drivers share in the rising cost of insurance.
That's why your rates tend to go up every time your policy is renewed, regardless of whether any individual factors, such as your driving history or location, have changed. The insurance lobby predicted that the move would raise rates for many people with good credit. In most cases, you can't buy deficit insurance or file a deficit insurance claim if you don't have collision or comprehensive coverage. State laws govern the amount of insurance coverage drivers must carry, and no-fault laws affect insurers' risks.
If you purchased deficit insurance from a dealer but allowed your car insurance to expire, you're probably in breach of your contract. Last summer, Washington's insurance commissioner Mike Kreidler issued an emergency order that prevented insurers from using credit ratings to determine Like 46 other states in the nation, Washington regulates, but does not prohibit, the use of credit information as one of many factors in insurance rating and underwriting. Washington State recently proposed that insurance companies stop using credit scores to determine how much someone should pay for auto, homeowners or renters insurance. The cheapest states for car insurance are Iowa, Vermont, and Nebraska, according to the WalletHub Cheap Car Insurance Study.
APCIA has argued that most consumers save money when credit-based insurance scores are used as a pricing factor, and without these tools, insurance rates could rise for more than a million drivers in Washington. Car insurance in Washington is expensive because cities like Seattle, Bellevue and Tacoma are among the top 10 for vehicle theft across the country. Drivers who previously received a lower rate because they have a strong credit history could now see their car insurance premiums rise due to the credit rating ban. Insurance Commissioner Kreidler has been trying to ban the practice, despite his own recognition that there is a correlation between credit and the risk of insurance loss.
If auto insurers consider credit, they could use it in conjunction with factors such as the driver's experience or history, history of accidents or claims, the type of car driven, or the distance a person normally drives. As for the Northwest Insurance Council, President Kenton Brine says insurers are telling the truth. They are the cheapest states for auto insurance largely because they have a low population density and relatively few uninsured drivers. No, deficit insurance will not cover a total car without insurance unless specifically permitted by the deficit policy, which is highly unlikely.
While insurers and industry groups have argued that credit-based insurance scores accurately predict risk, consumer advocacy groups have long argued that.