Western University EconomicsWestern Social Science

Credit Scores and Insurance

OCT 8, 2010

A while back my insurance company sent an agent to my house (mostly to annoy me, I think) . While reviewing my home insurance policy, he mentioned that I was getting a discount due to my high credit score. That surprised me, but he offered the view that my score meant I was more likely to keep up maintenance on my house, which sounded plausible. Anyway, the attached article indicates that - in the US at least - credit scores affect auto insurance rates, also, and some politicians and consumer groups want this to stop. Economists are inclined to think insurance markets work better with better (relevant) information - but there are other issues involved.