State Lawmakers Push to Ban Credit Scores in Insurance Premium Calculations
Lawmakers in several U.S. states are working to change laws that allow insurance companies to use credit histories to determine coverage costs. This practice often results in higher premiums for individuals with low credit scores. Currently, only a few states, such as California and Massachusetts, ban the use of credit history in setting insurance rates. However, bills are pending in states like Iowa, New York, Oklahoma, and Pennsylvania to prohibit this practice for homeowners and auto insurance policies. The use of credit-based insurance scores is controversial, as it can lead to significant cost disparities among consumers.