Credit Score News, Tips & Advice
Website CertifiedPrivacy Protected
Credit Score News, Tips & Advice « Credit Scores > Credit Score News > Home insurance costs generally go up due to poor credit scores

Home insurance costs generally go up due to poor credit scores

By Brian Anderson
Published: Wednesday, May 4th, 2011

25Credit scores can play a huge role in determining the cost of home insurance and most Ontario consumers are blissfully unaware of this fact. When this comes to light, they wish to ban the usage of credit scores in home insurance much in the same way that credit scores are banned in auto insurance.

Bryan Yetman, Chairman, Insurance Brokers Association of Ontario states that this is about consistency. If credit scores are not used for one product, he feels that the same should be extended to another product as well.

According to the IBAO survey, at least 75% of those surveyed were not aware of the fact that poor credit scores may lead to higher rates on home insurance. Around 76% wanted a ban on the usage of credit scores.

A consumer website has now been launched by the group with two specific goals in mind. The first one is to educate the general public about this by creating awareness and the next aim is to get them to reach out to their local leaders in order to demand a complete ban.

Some of the reasons for opposing the use of credit scores while determining home insurance rates are:

  • Because of the fact that it is discriminatory in nature and this type of scoring could raise premiums especially for those who belong to the low or moderate income groups.
  • Because it is never disclosed before you file the application. The lender will seek permission to check on the credit scores.
  • Because it is arbitrary in nature and the government in Ontario had passed rules last September and ordered auto insurers to stop seeking permission from customers to obtain a quote prior to renewing a policy or prior to providing a quote.
  • Because these reports are sometimes inaccurate and this could lead to problems for someone who actually has a good score but will lose out on the privileges because of an error in the credit report or credit scores.

This sort of discrimination causes a lot of problems especially for those who are unemployed, newcomers, widowed or divorced individuals etc. Most of these home insurers in Ontario are using the credit scores to hike up rates even up to 100% for some customers who have poor scores. This burdens people with extra costs at a time when there is such a huge price rise in every commodity that is required in our daily lives.

No Comments »

No comments yet.

RSS feed for comments on this post.

Leave a comment