High Court To Hear Credit-Based Insurance Scoring Case
The Michigan Supreme Court recently indicated that it would hear a case involving the use of credit-based insurance scoring in auto and home insurance rates. The court will hear testimony in the case in October of 2009.
Credit-based insurance scoring discounts help allocate the cost of coverage based on a policyholder’s claim potential. A 2007 study by the Federal Trade Commission found that credit-based insurance scores are effective predictors of risk under auto policies. Credit-based insurance scoring discounts allow many consumers to pay less for insurance than they otherwise would, and enables insurance companies to offer coverage to more consumers than they had in the past.
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