Credit Scoring Update

August 2022 Update:

A judge has overruled the rule prohibiting insurers from using credit scoring to set insurance rates. On Aug. 29 the insurance commissioner announced that he will not appeal the decision. Read on for further details. 

In March 2021, the insurance commissioner for Washington state issued an emergency ban on the use of credit scoring in determining home and auto insurance rates. All insurance carriers in Washington state filed new rates, without credit scoring.

Most of our clients saw changes in their insurance rates; some saw an increase as a discount was removed and others saw a decrease. As policies have come up for renewal, we've reached out to each client to review any changes and discuss possible discounts.

What's the latest update?

In summer 2021 the insurance commissioner began an administrative process to implement a three-year ban on credit scoring, which was scheduled to go into effect on March 4, 2022. A number of groups filed lawsuits challenging the regulation.

In February 2022, the OIC agreed to a stay on the ban while the court addresses the challenge. In the interim, most major insurance companies in Washington State reinstated credit scoring as a factor in determining insurance rates.

On July 29, 2022, a Thurston County Judge overturned the rule prohibiting insurers from using credit scoring to set insurance rates. The OIC will not appeal that decision.

What does this mean for you?

No matter the final outcome of the legal proceedings, it will likely take some time for rates to stabilize. Companies adjust rates for a variety of reasons, and we will continue to work to minimize the impact of any changes on their customers.

Fortunately, your McClain Insurance team is on your side! Our team deals with rate changes every year and we are here to help you. Every client's situation will be different and we will work with you to make sure you have the best possible rates and the coverage you need.

What should you do?

For many of our clients, the best option for now is to stay with their current insurance provider. As companies file new rates, they will likely weigh other factors more heavily, including your longevity as a customer. While it may be tempting to make a change, our goal is to make sure you're in the best possible position for the long-term. We'd hate to see you give up accident-free discounts and tenure for short-term rate savings only to see a negative impact as rating factors get realigned.

We do recommend taking advantage of all discounts that are available to you, such as low-mileage or driver safety discounts. You can fill out the pre-renewal questionnaire below to see whether you may qualify for additional discounts.