Photo courtesy of Clker.com
Approximately 40 states allow the use of credit in rating. (Rating is about how much premium to charge you. Underwriting is about deciding whether or not to accept your business and issue you a policy.) Effective, November 22, 2011, Massachusetts is one of the states that prohibits use of credit information by law. Although it was prohibited by regulation previously, a regulator could amend or repeal the prohibition. Now that it’s a law, only the legislators and governor could amend or prohibit the practice, providing much more stability for the consumer.
This is a very hot issue in the insurance world because many believe it’s a discriminatory process that doesn’t prove whether or not a driver is a good or bad risk. The majority of states do not allow credit rating to be used as the sole reason for rating/underwriting, but many still allow it as part of the company’s process.
According to the MA division of insurance, the key items that go into your pricing are: driving record, type and number of at-fault accidents and traffic violations, the vehicle your drive and the main place where you keep your car. The cannot use sex, marital status, race , creed, national origin, religion, age (except for safe drivers who are 65 years or older), occupation, income, education, and home ownership status.
Key Thing to Note: A ticket for an expired inspection sticker is a surchargable even and can increase your insurance premium for up to six years.
