This change will take effect June 20, 2021.
Historically insurers have set premiums by using a combination of data, including where you live, your age, driving record, and claims history. If you had good credit, you also likely received the Good Credit Discount, which reduced your premium. Your credit score will no longer be used. Due to this change, some of you may see a dramatic change in your current premium.
To show some perspective on how great an impact the credit rating could have, a 2020 report from the Consumer Federation of America (www.consumerfed.org) found that good drivers in Washington state with poor credit are charged 80% more on average than a good driver with excellent credit.
Proponents for the new ruling say credit scoring most negatively affects those with lower incomes as well as persons of color. A credit score can be affected by financial struggles, such as unemployment, high medical expenses, or recovery from natural disasters. All of these can have a greater negative impact on those with already limited financial resources.
Unfortunately, this also impacts consumers with good credit. If you previously had a good credit discount on your premium, you will likely see your premiums rise. Please note that this ruling affects all insurance companies and all premiums in the state of Washington.
If you have questions about how this new ruling affects your premium, or need help shopping your insurance coverage, call or contact Sea Mountain Insurance today. We’re happy to help.
You are welcome to let the Washington State Insurance Commissioner know how you feel about this new ruling, you can reach the commissioner’s office at 800-562-6900.