What does credit score have to do with insurance rates?
Insurance carriers use many factors to determine how much you’ll pay for your insurance. Those factors include age, location, claims history, driving record and your credit score. Many carriers have found credit scores to be one of the most predictive factors; showing that individuals with higher scores turn in less claims and those with lower credit scores turning in more claims with higher payouts. Washington, as well at more than 40 states utilize credit as a rating factor until the June 20th, 2021 emergency order issued by Insurance Commissioner Mike Kreidler.
What does the change mean for you?
A majority of Washington residents will see their rates change in the coming year due to this emergency order. Those with higher credit will likely see their rates increase while those with lower credit stand to see decreases. At this point the emergency order only allowed companies to remove credit alone, no other changes. In the coming months we know our companies will be filing new rate formulas to include deeper discounts for things like homeownership, multiple policies and length of time with current provider. These newly filed rates may take up to a year to be approved by the Office of the Insurance Commissioner.
What’s next for you?
Thankfully, you have Castell Insurance in your corner to guide you through the process. We are passionate about great coverage for a great price and will be doing our best to walk each of our existing clients as well as those new to our agency through those options.
For many, we won’t want to jump ship in this first year of changes only to find out the company they’ve moved to is taking a tremendous rate increase when they file their new rates. Most of our clients are receiving great benefits like accident forgiveness, driving monitor discounts and discounts for long term clients. We will work with each and every household to determine the best choice for this year and the years to come as the market slowly levels out.