On March 23rd, the Washington State Insurance Commissioner, Mike Kreidler, issued an emergency ruling prohibiting insurance companies from using a consumer’s personal credit score to set insurance rates or determine eligibility for coverage. All insurance carriers that write insurance policies in WA are affected.
This ruling affects all insurance consumers in WA either purchasing or renewing a home, personal auto, motorhome, motorcycle or rental dwelling insurance policy. The ruling does not affect commercial insurance policies, group or individual health policies.
The ruling takes affect on June 20th and will last for the next six months based on the Emergency Rule making powers in WA. If your insurance renewal falls on a date after the six month period of the rulling, you will have a chance that this ruling might not affect you, assuming it is not extended past the initial six months.
How this affects each consumer will vary. Unfortunately, consumers with a good credit score will find themselves with a rate increase on their personal policies. If a consumer has a low credit score from hardships suffered from COVID-19 or other financial/medical hardship, then you potentially will see some relief in your premium. If you have been able to keep your credit score in good standing, then the Office of Insurance Commissioner’s ruling will affect you the most.
The OIC ruling has all preferred insurance carrier such as Safeco, Grange, Progressive, The Hartford, Nationwide, State Farm, Farmers, Allstate, USAA and Travelers adjusting their way of rating the consumer since it cannot be based on credit. The major carriers have advised us that the consumer could see a rate increase of up to 25%. Below is link to the ruling:
https://www.insurance.wa.gov/news/kreidler-issues-emergency-rule-banning-credit-scoring-three-years
As your insurance policy renews, your insurance carrier will be removing discounts for good credit and that is where most of us will see the biggest change in the premium rate.
As your trusted insurance advisor, it is our recommendation to stay the course and not try to move to another carrier or policy option. If you try to move you won’t be able to take advantage of your good credit in the future, assuming the ruling is not extended. The emergency ruling is slated for a 6-month timeframe, so if you are on an annual policy your renewal time frame might fall outside of this ruling. The hope is that the emergency ruling will be removed, and the insurance carriers once again will be able to reward you for your good credit and be able to offer the discounts on your insurance premiums.
If you must change your policy, please keep in mind that there is potential to lose coverage benefits such as accident forgiveness, claims free discounts, longevity credits, or even grandfathered coverages and rates.
If you have concerns regarding your upcoming renewal, please reach out to our office at any time. 360-452-2314 We also have an easy way to schedule an appointment from our website. Click on your agent’s photo to schedule an appointment.
Thank you for being a valued client and allowing us to help you navigate through these unprecedented times.
Respectfully,
Andy Callis
President, Callis & Associates, Inc.
