Law protects against discriminatory use of credit score information in auto insurance increases

Governor John Carney on Tuesday signed a bill to protect the Delawaren from predatory car and home insurance practices.

State Insurance Commissioner Trinidad Navarro said he heard from many Delawarens during the election campaign – and since taking office – that they were targeted by insurers simply because they had lost their jobs or had lost their jobs. divorced.

Groups like the NAACP wanted to remove the ability of insurance companies to use credit scores and factor age increases that they use to calculate rate increases.

Navarro says the elderly were particularly outspoken on the matter.

“We were getting information especially from our senior population that their insurance rates were going up just because they got older, not because they had received tickets or driven more miles, bought a new Lamborghini,” said Navarro.

He says the new law was originally inspired by a California law that completely banned the use of credit scores in the equation used by insurance companies to determine rate increases.

“We have done our research and found in many instances that the use of credit score is discriminatory in nature,” Navarro said.

But, he says, there has been a significant setback on the part of the local insurance industry.

“They brought in experts from across the country – they brought in lobbyists, lawyers … it was kind of funny that they had all these experts and we had a local agent named Joe.”

Navarro says the result was a compromise that prohibits insurance companies from using credit scores that include information such as income, gender, sexual orientation, zip code, race, ethnicity, nationality, religion and other factors.

And – for those who have no credit score at all – this factor will not be used against them.

Under the law, companies will also not be able to increase tariffs because of a change in marital status due to the death of a spouse – or just because a person turns 75.

According to Navarro’s office, about 60% of the private passenger auto insurance market in Delaware is supportive of the law.

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